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FIAT  MONEY  INFLATION 
IN  FRANCE  ^ 


HOW  IT  CAME, 

WHAT  IT   BROUGHT,   AND 

HOW   IT  ENDED 


BY 

ANDREW  D.  WHITE 

LL.D.  (Yale),  L.  H.  D.  (Columbia),  Ph.  Dr.  (Jena) 

LATE    PRESIDENT    AND    PROFESSOR    OF    HISTORY    AT    CORNELL    UNIVERSITY 


TO  WHICH  IS  ADDED  AN  EXTRACT  FROM 
MACAULAY  SHOWING  THE  RESULTS  OF  TAM- 
PERING    WITH     THE     CURRENCY     IN     ENGLAND 


NEW   YORK 
D.  APPLETON    AND    COMPANY 


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The   Monetary  and    Banking   Problem.      By  Logan  g. 

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the  nature,  orig-in,  and  function  of  money,  which  one  must  thoroughly  and 
correctly  understand  before  he  can  be  able  to  reason  correctly  about  the  silver 
problem."— Hon.  David  A.  Wells. 

Wages  and  Capital.  An  Examination  of  the  Wages  Fund  Doc- 
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etc.     With  Sixteen  Charts  and  numerous  Tables.     8vo.     Cloth,  $2.25. 

Money  and  the  Mechanism  of  Exchange.    By  w.  Stanley 

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Financial  History  of  the  United  States,  from  1774  to  188 

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versity.    8vo.     Cloth,  $2.50. 

Recent  Economic  Changes,  and  their  Effect  on  the  Produc- 
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FIAT  MONEY  IN   FRANCE 


HOW  IT  CAME,  WHAT  IT  BROUGHT 
AND  HOW  IT  ENDED 


BY 


ANDREW  D.  WHITE 


NE^  AND  REVISED  EDITION 


NEW    YORK 
APPLETON    AND    COMPANY 
1896 


Copyright,  1876,  1896, 
By  D.  APPLETON  AND  COMPANY. 


hpiiif  1. 


mTEODUCTION. 


As  far  back  as  just  before  tlie  civil  war  I  made 
a  large  collection  of  documents  which  appeared 
during  the  French  Revolution,  including  news- 
papers, reports,  speeclies,  pamphlets,  and  illustra- 
tive material  of  every  sort,  and  especially  speci- 
mens of  nearly  all  the  issues  of  paper  money  then 
made — from  notes  of"  ten  thousand  francs  to  those 
of  one  sou.  — 

Upon  this  material,  mainly,  was  based  a  course 
of  lectures  then  given  to  my  university  students, 
and  among  these  lectures  one  on  Patper  Money 
Inflation  in  France. 

This  was  given  simply  because  it  showed  one 

important  line  of  facts  in  that  great  struggle;  anti 

I  recall,  as  if  it  were  yesterday,  my  feeling  of  regret 

at  being  obliged  to  bestow  so  much  care  and  labor 

upon  a  subject  to  all  appearance  so  utterly  devoid 

of  practical  value.    I  am  sure  that  it  never  occurred 

either  to  my  students  or  myself  that  it  could  have 

iii 


iv  FIAT   MONEY  IN  FRANCE. 

any  bearing  on  our  own  country.  It  certainly  never 
entered  into  our  minds  that  any  such  folly  as  that 
exhibited  in  those  French  documents  of  the  eight- 
eenth century  would  eventually  find  supporters  in 
the  United  States  of  the  nineteenth. 

Some  years  later,  when  there  began  to  be  pro- 
posals for  large  issues  of  paper,  I  wrought  some  of 
the  facts  thus  collected  into  a  speech  in  the  Senate 
of  the  State  of  JSTew  York,  showing  the  need  of 
especial  care  in  such  dealings  with  financial  ne- 
cessities. 

In  1876,  during  the  "greenback  craze,"  General 
Garfield  and  Mr.  S.  B.  Chittenden,  both  members 
of  the  House  of  Eepresentatives  at  that  time,  asked 
me  to  read  a  paper  on  the  same  general  subject 
before  an  audience  of  Senators  and  Eepresentatives 
of  both  parties  in  Washington.  This  I  did,  and 
also  gave  it  before  an  assemblage  of  New  York 
men  of  business  at  the  Union  League  Club. 

Various  editions  of  the  paper  were  afterward 
published,  among  these  one  for  campaign  purposes, 
and  it  now  appears  that  there  is  a  demand  for  an- 
other, and  that  it  may  be  of  use  in  showing  to  what 
folly,  cruelty,  WTong,  and  ruin  the  passion  for  fiat 
money  may  lead. 

There  is  perhaps  a  special  reason  for  issuing 
this  new  edition,  in  the  fact  that  the  principle  in- 


INTRODUCTION.  y 

Volved  in  the  proposed  unlimited  coinage  of  silver 
in  the  United  States  is,  at  bottom,  identical  with 
the  idea  which  led  to  that  fearful  wreck  of  public 
and  private  prosperity  in  France. 

And  there  is  an  added  reason  in  the  fact  that 
the  utterances  of  the  Chicago  nominee  and  of  the 
Populist  platform  point  clearly  and  unmistakably 
to  unlimited  issues  of  paper  money  hereafter. 
Whatever  so-called  "Democrats"  may  intend  at 
present,  their  candidate  and  his  Populist  supporters 
are  logical  enough  to  see  that  it  would  be  inconsist- 
ent to  stop  at  the  unlimited  issue  of  silver  dollars, 
which  really  cost  something,  when  they  can  issue 
unlimited  paper  dollars  which  virtually  cost 
nothing. 

In  thus  exhibiting  facts  which  Lord  Bacon 
would  have  recognized  as  confirming  his  theory  of 
The  Possible  Insanity  of  Great  States,  it  is  but  just 
to  acknowledge  that  the  French  proposal  was  vastly 
more  sane  than  that  now  made  in  our  own  country. 
The  French  issues  of  paper  rested  not  merely  "  on 
the  will  of  a  free  people,"  but  on  more  than  one 
third  of  the  entire  landed  property  of  France ;  on 
the  very  choicest  of  real  estate  in  city  and  coun- 
try— the  confiscated  estates  of  the  Church  and  the 
fugitive  aristocracy — with  power  to  use  the  paper 
thus  issued  in  purchasing  this  real  property  at  very 


Vi  FIAT  MONEY  IN  FRANCE 

moderate  prices.  Our  proposed  unlimited  issue  of 
silver  rests  on  we  know  not  what ;  and  the  pro- 
posed issue  of  paper  rests  solely  upon  the  judgment, 
the  will,  and  the  schemes  for  political  success  or 
personal  gain  of  those  Populist  financiers  who  shall 
be  put  in  control  at  Washington,  and  who  will 
doubtless  be  astute  enough  to  see  and  to  use  the 
enormous  possibilities  for  stockjobbing  and  gam- 
bling in  values  which  will  accrue  to  those  who,  by 
controlling  the  issues  of  the  circulating  medium, 
can  raise  or  depress  the  price  of  every  share  of 
stock,  every  bond,  every  yard  of  every  fabric,  every 
ounce  of  every  commodity  within  the  United  States. 
I  have  taken  all  pains  to  be  exact,  giving  the 
authority  for  every  important  statement,  and  now 
leave  the  whole  matter  with  my  readers. 

Andrew  D.  White. 
Ithaca,  N.  Y.,  August  8, 1896. 


FIAT  MONEY  IN  FRANCE. 

HOW  IT   CAME,  WHAT  IT  BROUGHT, 
AND   HOW   IT   ENDED.* 

Near  the  end  of  the  year  1789  the  French 
nation  found  itself  in  deep  financial  embarrass- 
ment :  there  was  a  heavy  debt  and  a  serious  deficit. 

The  vast  reforms  of  that  year,  though  a  lasting 
blessing  politically,  were  a  temporary  evil  finan- 
cially. There  was  a  genei^l  want  of  confidence  in 
business  circles ;  capital  had  shown  its  proverbial 
timidity  by  retiring  out  of  sight  as  far  as  possible ; 
but  little  money  was  in  circulation ;  throughout  the 
land  was  temporary  stagnation. 

Statesmanlike  measures,  careful  watching,  and 
wise  management,  would  doubtless  have  led,  ere 
long,  to  a  return  of  confidence,  a  reappearance  of 
money,  and  resumption  of  business  ;f  but  this  in- 

*  A  paper  read  before  a  meeting  of  Senators  and  members 
of  the  House  of  Representatives  of  both  political  parties,  at 
Washington,  April  12th;  and  before  the  Union  League  Club, 
at  New  York,  April  13,  1876. 

t  For  proof  that  the  financial  situation  of  France  at  that 
time  was  by  no  means  hopeless,  see  S torch,  Economie  Politique, 
vol.  iv,  p.  159, 


2  FIAT  MONEY  IN  FRANCE. 

volved  waiting,  self-denial,  and  self-sacrifice ;  and 
thus  far  in  human  history  those  are  the  rarest 
products  of  an  improved  political  condition.  Few 
nations,  up  to  this  time,  have  been  able  to  exercise 
these  virtues ;  and  France  was  not  then  one  of 
those  few. 

There  was  a  general  looking  about  for  some  short 
road  to  prosperity ;  ere  long,  the  idea  was  set  afloat 
that  the  great  want  of  the  country  was  more  of  the 
circulating  medium ;  and  this  was  speedily  followed 
by  calls  for  an  issue  of  paper  money.  The  Minister 
of  Finance  at  this  period  was  Necker.  In  financial 
ability  he  was  acknowledged  among  the  great  bank- 
ers of  Europe;  but  he  had  something  more  than 
financial  ability :  he  had  a  deep  feeling  of  patriot- 
ism and  a  high  sense  of  personal  honor.  The  difii- 
culties  in  his  way  were  great,  but  he  steadily  en- 
deavored to  keep  France  faithful  to  those  financial 
principles  which  the  general  experience  of  modern 
times  had  established  as  the  only  path  to  national 
safety.  As  difficulties  arose,  the  National  Assembly 
drew  away  from  him,  and  soon  came  among  the 
members  muttered  praises  of  paper  money;  mem- 
bers like  Allarde  and  Gouy  held  it  up  as  a  panacea 
— as  a  way  of  "securing  resources  without  paying 
interest."  This  was  echoed  outside ;  the  journalist 
Loustalot  caught  it  up  and  proclaimed  its  beauties ; 


FIAT  MONEY  IN  FRANCE.  3 

Marat,  in  his  newspaper,  also  joined  the  cries  against 
Necker,  picturing  him — ^a  man  who  gave  up  health 
and  fortune  for  the  isake  of  France — as  a  wretch 
seeking  only  to  enrich  himself  from  the  public 
purse. 

Against  the  tendency  to  the  issue  of  irredeem- 
able paper  Necker  contended  as  best  he  might.  He 
knew  well  to  what  it  had  always  led,  even  when  sur- 
rounded by  the  most  skillful  guarantees.  Among 
those  who  struggled  to  aid  him  outside  the  National 
Assembly  was  Bergasse,  a  deputy  from  Lyons, 
whose  pamphlets  against  an  irredeemable  paper 
exerted,  perhaps,  a  wider  influence  than  any  others ; 
parts  of  them  seem  fairly  inspired.  Any  one  to-day 
reading  his  prophecies  of  the  evils  sure  to  follow 
such  a  currency  would  certainly  ascribe  to  him  a 
miraculous  foresight,  were  it  not  so  clear  that  this 
prophetic  power  was  simply  due  to  a  knowledge  of 
natural  laws.*  But  the  current  was  too  strong ;  on 
the  19th  of  April,  1790,  the  Finance  Committee  of 
the  Assembly  reported  that  "  the  people  demand  a 
new  circulating  medium  "  ;  that  "  the  circulation  of 

*  See  Buchez  and  Roux,  Histoire  Parlementaire  de  la  Revo- 
lution Fran^aise,  vol.  iii,  pp.  364,  365 ;  also  p.  405. 

For  pamphlet  itself,  see  the  A.  D.  White  Collection  in  the 
Library  of  Cornell  University ;  for  the  effect  produced  by  it,  see 
Challamel,  Les  Fran^ais  sous  la  Revolution.    Also,  De  ^Ol^<^^v. 
La  Societe  Fran5aise  pendant  la  Revolution.  ,^        "^ 


4  FIAT  MONEY  IN  FRANCE. 

paper  money  is  the  best  of  operations  "  ;  that  "  it  is 
the  most  free  because  it  reposes  on  the  will  of  the 
people  "  ;  that  "  it  will  bind  the  interests  of  the  citi- 
zens to  the  public  good." 

The  report  appealed  to  the  patriotism  of  the 
French  people  with  the  following  exhortation : 
*'  Let  us  show  to  Europe  that  we  understand  our 
own  resources ;  let  us  immediately  take  the  broad 
road  to  our  liberation,  instead  of  dragging  ourselves 
along  the  tortuous  and  obscure  paths  of  fragmentary 
loans  : "  it  concluded  by  recommending  an  issue  of 
paper  money,  carefully  guarded,  to  the  amount  of 
four  hundred  million  francs.  The  next  day  the  de- 
bate begins.  M.  Martineau  is  loud  and  long  for 
paper  money.  His  only  fear  is,  that  the  committee 
has  not  authorized  enough  of  it ;  he  declares  that 
business  is  stagnant,  and  that  the  sole  cause  is  a 
want  of  more  of  the  circulating  medium ;  that 
paper  money  ought  to  be  made  a  legal  tender  ;  that 
the  Assembly  should  rise  above  the  prejudices 
which  the  failure  of  John  Law's  paper  money  had 
caused.  Like  every  supporter  of  irredeemable 
paper  money  before  or  since,  he  seems  to  think  that 
the  laws  of  Nature  have  changed  since  previous  dis- 
astrous issues.  He  says  :  "  Paper  money  under  a 
despotism  is  dangerous ;  it  favors  corruption ;  but 
in  a  nation  constitutionally  governed,  which  itself 


FIAT  MONEY  IN  FBANCE.  5 

takes  care  of  the  emission  of  its  notes,  which  deter- 
mines their  number  and  use,  that  danger  no  longer 
exists."  He  insists  that  John  Law's  notes  at  first 
restored  prosperity,  but  that  the  wretchedness  and 
wrong  they  caused  resulted  from  their  overissue, 
and  that  such  an  overissue  is  possible  only  under  a 
despotism.* 

M.  de  la  Eochefoucauld  gives  his  opinion  that 
"  the  assignats  will  draw  specie  out  of  the  coffers 
where  it  is  now  hoarded."  f 

On  the  other  hand,  Cazales  and  Maury  showed 
that  the  result  could  only  be  disastrous.  Never, 
perhaps,  did  a  political  prophecy  meet  with  more 
exact  fulfillment  in  every  line  than  the  terrible  pic- 
ture drawn  in  one  of  Cazales's  speeches  in  this  de- 
bate. Still  the  current  ran  stronger  and  stronger ; 
Petion  made  a  brilliant  oration  in  favor  of  the  re- 
port, and  Necker's  influence  and  experience  were 
gradually  worn  away. 

But  mingled  with  the  financial  argument  was  a 
very  strong  political  argument.  The  nation  had 
just  taken  as  its  own  the  vast  real  property  of  the 
French  Church,  the  pious  accumulations  of  thirteen 
hundred  years.     There  were  princely  estates  in  the 


*  See  Moniteur,  sitting  of  April  10,  1790. 
t  Ibid.,  sitting  of  April  15, 1790. 


6  FIAT  MONEY  IN  FRANCE. 

country,  sumptuous  palaces  and  conventual  build- 
ings in  the  towns ;  these  formed  about  one  third  of 
the  entire  real  property  of  France,  and  amounted  in 
value  to  about  four  thousand  million  francs,  yielding 
a  yearly  income  of  about  two  hundred  millions."^ 
By  one  sweeping  stroke  all  this  had  become  the 
property  of  the  nation  ;  never,  apparently,  did  a  na- 
tion secure  a  more  solid  basis  for  a  great  financial 
future. 

There  were  two  great  reasons  why  French  states- 
men desired  speedily  to  sell  these  lands.  First,  a 
financial  reason — to  obtain  money  to  relieve  the 
Government.  Secondly,  a  political  reason — to  get 
this  land  distributed  among  the  thrifty  middle  classes, 
and  so  to  commit  them  to  the  Kevolution  and  to  the 
Government  which  gave  their  title. 

It  was  urged,  then,  that  the  issue  of  four  hun- 
dred millions  of  paper  would  give  the  treasury 
something  to  pay  out  immediately,  and  relieve  the 
national  necessities ;  that,  having  been  put  into  cir- 
culation, this  paper  money  would  stimulate  business ; 
that  it  would  give  to  all  capitalists,  large  or  small, 
the  means  for  buying  of  the  nation  the  ecclesiastical 
real  estate,  and  that  from  the  proceeds  of  this  real 

*  See  De  Nervo,  Finances  Franyaises,  vol.  ii,  p.  236 ;  also 
Alison,  vol.  i. 


FIAT  MONEY  IN  FRANCE.  7 

estate  the  nation  would  again  obtain  new  funds  for 
new  necessities :  never  was  theory  more  seductive 
both  to  financiers  and  statesmen. 

But  it  would  be  a  great  mistake  to  suppose  that 
the  statesmen  of  France,  or  the  French  people,  were 
ignorant  of  the  dangers  of  issuing  irredeemable 
paper  money.  No  matter  how  skillfully  the  bright 
side  of  such  a  currency  was  exhibited,  all  thought- 
ful men  in  France  knew  something  of  its  dark  side. 
They  knew  too  well,  from  that  fearful  experience  in 
John  Law's  time,  the  difficulties  and  dangers  of  a 
currency  not  based  upon  specie.  They  had  then 
learned  how  easy  it  is  to  issue  it ;  how  difficult  it  is 
to  check  an  overissue ;  how  seductively  it  leads  to 
the  absorption  of  the  means  of  the  workingmen  and 
men  of  small  fortunes ;  how  surely  it  impoverishes 
all  men  living  on  fixed  incomes,  salaries,  or  wages ; 
how  it  creates  on  the  ruins  of  the  prosperity  of  all 
workingmen  a  small  class  of  debauched  speculators, 
the  most  injurious  class  that  a  nation  can  harbor, 
more  injurious,  indeed,  than  professional  criminals 
whom  the  law  recognizes  and  can  throttle ;  how  it 
stimulates  overproduction  at  first,  and  leaves  every 
industry  flaccid  afterward ;  how  it  breaks  down 
thrift,  and  develops  political  and  social  immorality. 
All  this  France  had  been  thoroughly  taught  by  ex- 
perience.    Many  then  living  had  felt  the  results  of 


8  FIAT   MONEY  IN  FRANCE. 

such  an  experiment — the  issues  of  paper  money  un- 
der John  Law,  a  man  who  is  to  this  day  acknowl- 
edged one  of  the  most  ingenious  financiers  the  world 
has  ever  known ;  and  there  were  then  sitting  in  the 
National  Assembly  of  France  many  who  owed  the 
poverty  of  their  families  to  those  issues  of  paper. 
Hardly  a  man  in  the  country  who  had  not  heard 
those  who  issued  it  cursed  as  the  authors  of  the 
most  frightful  catastrophe  France  had  then  known. "^ 
It  was  no  mere  attempt  at  theatrical  display,  but  a 
natural  impulse,  which  led  a  thoughtful  statesman, 
during  this  debate,  to  hold  up  in  the  Assembly  a 
piece  of  paper  money,  and  to  declare  that  it  was 
moistened  with  the  blood  and  tears  of  their  fathers. 
And  it  would  also  be  a  mistake  to  suppose  that  the 
National  Assembly  which  discussed  this  matter  was 
composed  of  mere  wild  revolutionists ;  no  supposi- 
tion could  be  more  wide  of  the  fact.  Whatever 
may  have  been  the  character  of  the  men  who  legis- 
lated for  France  afterward,  no  thoughtful  student 
of  history  can  deny,  despite  all  the  arguments  and 
sneers  of  English  Tory  statesmen  and   historians, 

*  For  striking  pictures  of  this  feeling  among  the  younger 
generation  of  Frenchmen,  see  Challamel,  Sur  la  Revolution,  p. 
SOS.  For  general  history  of  John  Law's  paper  money,  see 
Henri  Martin,  Histoire  de  France;  also  Blanqui,  Histoire  de 
rficonomie  Politique,  vol.  ii,  pp.  65-87 ;  also  Senior  on  Paper 
Money,  section  iii,  Part  I ;  also  Thiers. 


FIAT  MONEY  IN  FRANCE.  9 

that  few  more  keen-sighted  and  patriotic  legislative 
bodies  have  ever  sat  upon  this  earth  than  this  first 
French  Constituent  Assembly.  In  it  were  such  men 
as  Sieyes,  Bailly,  Necker,  Mirabeau,  Talleyrand, 
Dupont,  and  a  multitude  of  others  who,  in  various 
sciences  and  in  the  political  world,  had  already 
shown,  and  were  destined  afterward  to  show,  them- 
selves among  the  strongest  and  shrewdest  men  that 
Europe  has  yet  seen. 

But  the  current  toward  paper  money  had  become 
irresistible.  It  was  constantly  urged,  and  with  a 
great  show  of  force,  that  if  any  nation  could  safely 
issue  paper  money,  France  was  now  that  nation ; 
that  she  was  fully  warned  by  her  severe  experience 
under  John  Law ;  that  she  was  now  a  constitutional 
government,  controlled  by  an  enlightened,  patriotic 
people ;  not  as  in  the  days  of  the  former  issue  of 
paper  money,  an  absolute  monarchy  controlled  by 
politicians  and  adventurers;  that  she  was  able  to 
secure  every  franc  of  her  paper  money  by  a  virtual 
mortgage  of  a  landed  domain  vastly  greater  in 
value  than  the  entire  issue;  that,  with  men  like 
Bailly,  Mirabeau,  and  Necker,  at  her  head,  she 
could  not  commit  the  financial  mistakes  and  crimes 
from  which  France  had  suft'ered  when  at  the  head 
stood  John  Law  and  the  Regent  and  Cardinal  Du- 
bois. --X'^i,^ 


10  FIAT  MONEY  IN  FRANCE. 

Oratory  prevailed  over  science  and  experience. 
In  December,  1789,  came  the  first  decree.  After 
much  discussion  it  was  decided  to  issue  four  hun- 
dred million  francs  in  paper  money,  based  upon  the 
landed  property  of  the  nation  as  its  security.  The 
deliberations  on  this  first  decree,  and  on  the  bill 
carrying  it  into  effect,  were  most  interesting ;  prom- 
inent in  the  debate  were  Necker,  Dupont,  Maury, 
Cazales,  Bailly,  and  many  others  hardly  inferior. 
The  discussion  was  certainly  very  able ;  no  person 
can  read  it  at  length  in  the  Moniteur,  or  even  in  the 
summaries  of  the  parliamentary  history,  without 
feeling  that  English  historians  have  done  wretched 
injustice  to  those  men  who  were  then  endeavoring 
to  stand  between  France  and  ruin. 

At  last,  in  April,  1790,  the  four  hundred  mil- 
lion francs  were  issued  in  assignats — paper  money 
secured  by  a  pledge  of  productive  real  estate,  and 
bearing  interest  to  the  holder  at  three  per  cent.  No 
irredeemable  currency  has  ever  claimed  a  more  sci- 
entific and  practical  guarantee  for  its  goodness  and 
for  its  proper  action  on  public  finances.  On  one 
side  it  had  what  the  world  universally  recognized 
as  the  most  practical  security — a  mortgage  on  pro- 
ductive real  estate  of  vastly  greater  value  than  the 
issue.  On  the  other  hand,  as  the  notes  bore  interest, 
there  was  every  reason  for  their  being  withdrawn 


FIAT  MONEY  IN  FRANCE.  H 

from    circulation    whenever    they  became    redun- 
dant.* 

As  speedily  as  possible  the  notes  were  put  in  cir- 
culation. Unlike  those  issued  in  John  Law's  time, 
they  were  engraved  in  the  best  style  of  the  art.  To 
stimulate  loyalty,  the  portrait  of  the  king  was  placed 
in  the  center ;  to  stimulate  patriotism,  patriotic  leg- 
ends and  emblems  surrounded  him;  to  stimulate 
public  cupidity,  the  amount  of  interest  which  the 
note  would  yield  each  day  to  its  holder  was  printed 
in  the  margin ;  and  the  whole  was  duly  garnished 
with  stamps  and  signatures,  showing  that  it  was 
under  careful  registration  and  control.f  Having 
thus  given  France  a  new  currency,  the  National 
Assembly,  to  explain  its  advantages,  issued  an  ad- 
dress to  the  French  people.  In  this  address  the 
Assembly  spoke  of  the  nation  as  "delivered  by 
this  grand  means  from  all  uncertainty,  and  from 
all  ruinous  results  of  the  credit  system."  It  fore- 
told that  this  issue  "would  bring  back  into  the 
public  treasury,  into  commerce,  and  into  all  branch- 


*  See  Buchez  and  Roux,  Histoire  Parlementaire,  vol.  v,  p. 
321,  et  seq.  For  an  argument  to  prove  that  the  assignats  were 
after  all  not  so  well  secured  as  John  Law's  money,  see  Storch, 
Economle  Politique,  vol.  iv,  p.  160. 

t  For  specimens  of  this  issue,  as  of  John  Law's  notes  and  of 
nearly  every  issue  during  the  French  Revolution,  see  the  A.  D. 
White  collection  as  above. 
2 


12  FIAT   MONEY  IN  FRANCE. 

es  of  industry,  streDgth,  abundance,  and  prosper!- 
ty."  * 

Some  of  the  arguments  used  in  this  address  are 
worth  recalling  : 

"  Paper  money  is  without  inherent  value,  unless 
it  represents  some  special  property.  Without  rep- 
resenting some  special  property  it  is  inadmissible  in 
trade  to  compete  with  a  metallic  currency,  which 
has  a  value  real  and  independent  of  the  public 
action ;  therefore  it  is  that  the  paper  money  which 
has  only  the  public  authority  as  its  basis  has  always 
caused  ruin  where  it  has  been  established ;  that  is 
the  reason  why  the  bank  notes  of  1720,  issued  by 
John  Law,  after  having  caused  terrible  evils,  have 
only  left  frightful  memories.  Therefore  it  is  that 
the  National  Assembly  has  not  wished  to  expose  you 
to  this  danger,  but  has  given  this  new  paper  money, 
not  only  a  value  derived  from  the  national  authority, 
but  a  value  real  and  immutable ;  a  value  which  per- 
mits it  to  sustain  advantageously  a  competition  with 
the  precious  metals  themselves."  f 

But  the  final  declaration  is  perhaps  the  most  in- 
teresting.    It  was  as  follows : 

"  These  assignats,  bearing  interest  as  they  do, 

*  See  Addresse  de  TAssemblee  Nationale  sur  les  Amissions 
d' Assignats  Monnaies,  p.  5, 
t  Ibid.,  p.  10. 


FIAT  MONEY  IN  FRANCE.  13 

will  soon  be  considered  better  than  the  coin  now 
hoarded,  and  will  again  bring  it  out  into  circula- 
tion." 

This  legislation  caused  great  joy.  Among  the 
various  utterances  of  this  feeling  was  the  public 
letter  of  M.  Sarot  directed  to  the  editor  of  the  Jour- 
nal of  the  National  Assembly,  and  scattered  through- 
out France.  M.  Sarot  is  hardly  able  to  contain  him- 
self as  he  anticipates  the  prosperity  and  glory  that 
this  issue  of  paper  is  to  bring  to  his  country.  '  One 
thing  only  vexes  him,  and  that  is  the  pamphlet  of 
M.  Bergasse  against  the  assignats;  therefore  it  is 
that  after  a  long  series  of  arguments  and  protesta- 
tions, in  order  to  give  a  final  proof  of  his  confidence 
in  the  paper  money,  and  his  entire  skepticism  as  to 
the  evils  predicted  by  Bergasse  and  others,  M.  Sarot 
solemnly  lays  his  house,  garden,  and  furniture  upon 
the  altar  of  his  country,  and  offers  to  sell  them  for 
paper  money  alone.* 

The  first  result  of  this  issue  was  apparently  all 
that  the  most  sanguine  could  desire ;  the  treasury 
was  at  once  greatly  relieved ;  a  portion  of  the  pub- 
lic debt  was  paid ;  creditors  were  encouraged ; 
credit  revived  ;  ordinary  expenses  were  met,  and 
the  paper  money  having  thus  been  passed  from  the 

'"  See  Lettre  de  M.  Sarot,  Paris,  April  19,  1790. 


14  FIAT  MONEY  IN  FRANCE, 

Government  into  the  midst  of  the  people,  trade 
was  revived,  and  all  difficulties  seemed  past.  The 
anxieties  of  Keeker,  the  prophecies  of  Bergasse, 
Maury,  and  Cazales,  seemed  proven  utterly  futile. 
And,  indeed,  it  is  quite  possible  that,  if  the  national 
authorities  had  stopped  with  this  issue,  few  of  the 
evils  which  afterward  arose  would  have  been  se- 
verely felt ;  the  four  hundred  millions  of  paper 
money  then  issued  had  simply  taken  the  place  of  a 
similar  amount  of  specie.  But  soon  there  came 
another  result :  times  grew  less  easy ;  by  the  end 
of  August,  within  four  months  after  the  issue  of 
the  four  hundred  million  assignats,  the  Government 
had  spent  them,  and  was  again  in  distress.*  The 
old  remedy  immediately  and  naturally  occurred  to 
the  minds  of  men.  Thoughtless  persons  through- 
out the  country  began  to  cry  out  for  another  issue 
of  paper;  thoughtful  men  then  began  to  recall 
what  their  fathers  had  told  them  about  the  seduc- 
tive path  of  paper-money  issues  in  John  Law's 
time,  and  to  remember  the  prophecies  that  they 
themselves  had  heard  in  the  debate  on  the  first 
issue  of  assignats  less  than  six  months  before. 

In  that  debate,  as  we  have  seen,  Maury  and  Ca- 


*  Von  Sybel,  History  of  the  French  Revolution,  vol.  i,  p. 
252. 


FIAT  MONEY  IN  FRANCE.  15 

zales  foretold  trouble.  Necker,  who  was  less  sus- 
pected of  reactionary  tendencies,  had  certainly 
feared  danger.  The  strong  opponents  of  paper 
had  prophesied,  at  that  time,  that,  once  on  the 
downward  path  of  inflation,  the  nation  could  not 
be  restrained,  and  that  more  issues  would  follow. 
The  supporters  of  the  first  issue  had  asserted  that 
this  was  a  calumny ;  that  France  could  and  would 
check  these  issues  whenever  she  desired. 

The  condition  of  opinion  in  the  Assembly  was, 
therefore,  chaotic;  a  few  schemers  and  dreamers 
were  loud  and  outspoken  for  paper  money ;  many 
of  the  more  shallow  and  easy-going  were  inclined 
to  yield ;  the  more  thoughtful  endeavored  man- 
fully to  breast  the  current. 

One  man  there  was  who  had  strength  to  stand 
this  pressure :  Mirabeau.  He  was  the  popular 
idol,  the  great  orator  of  the  Assembly ;  and  he  was 
much  more  than  a  great  orator :  he  had  carried  the 
nation  through  some  of  its  greatest  dangers  by  a 
boldness  almost  godlike ;  in  the  various  conflicts  he 
had  shown  not  only  oratorical  boldness,  but  a  fore- 
sight of  great  value  at  the  beginning  of  a  revolu- 
tion. As  to  his  real  opinion  upon  an  irredeemable 
currency,  there  can  be  no  doubt.  It  was  the  opin- 
ion which  all  true  statesmen  have  held,  before  his 
time  and  since,  in  his  own  country,  in  England,  in 


16  FIAT  MONEY  IN  FRANCE. 

America,  in  every  modern  civilized  nation.  In  his 
letter  to  Cerutti,  written  in  January,  1789,  hardly 
six  months  before,  he  spoke  of  paper  money  as  "  a 
nursery  of  tyranny,  corruption,  and  delusion ;  a 
veritable  debauch  of  authority  in  delirium."  In 
his  private  letters  written  at  this  very  time,  which 
were  revealed  at  a  later  period,  he  showed  that  he 
was  fully  aware  of  the  dangers  of  inflation,  but  he 
yielded  to  the  pressure :  partly  because  he  thought 
it  important  to  relieve  the  treasury  at  once ;  partly 
because  he  thought  it  important  to  sell  the  Govern- 
ment lands  rapidly  to  the  people,  and  so  develop 
speedily  a  large  class  of  small  landholders,  pledged 
to  stand  by  the  Government  which  gave  them  their 
titles ;  partly,  doubtless,  from  a  love  of  immediate 
rather  than  remote  applause ;  and  wholly  in  a  vague 
hope  that  the  severe,  inexorable  laws  of  finance, 
which  had  brought  heavy  punishments  upon  gov- 
ernments emitting  an  irredeemable  currency  in 
other  lands,  at  other  times,  might,  in  some  way, 
be  warded  off  from  France,  at  this  time.*^ 

The  question  was  brought  up  by  Montesquiou's 
report  on  the  2Yth  of  August.  This  report,  though 
somewhat  noncommittal,  leaned,  on  the  whole,  to- 

*  For  Mirabeau's  real  opinion  on  irredeemable  paper,  see 
letter  to  Cerutti,  in  leading  article  of  the  Moniteur;  also 
Memoires  de  Mirabeau,  vol.  vii,  pp.  23,  24,  and  elsewhere. 


FIAT  MONEY  IN  FRANCE.  17 

ward  an  additional  issue  of  paper.  It  goes  on  to 
declare  that  the  original  issue  of  four  hundred 
^millions,  though  opposed  at  the  beginning,  had 
proved  successful ;  that  assignats  are  the  most 
economical  method,  though  they  have  dangers; 
and  as  a  climax  came  the  declaration,  "We  must 
save  the  country."  Still  the  committee  hesitated  to 
advise  the  new  issue.* 

Upon  this  report,  on  the  27th  of  August,  1790, 
Mirabeau  made  a  striking  speech.  He  confessed 
that  he  had  at  first  feared  the  issue  of  assignats, 
but  that  he  now  dared  urge  it ;  that  experience  had 
shown  the  issue  of  paper  money  most  serviceable ; 
that  the  report  proved  the  first  issue  of  assignats 
a  great  success ;  that  public  affairs  had  come  out  of 
distress  satisfactorily;  that  ruin  had  been  averted, 
and  credit  established.  He  then  argues  that  there 
is  a  difference  between  paper  money  of  the  old  sort, 
from  which  the  nation  had  suffered  so  much  in 
John  Law's  time,  and  paper  money  of  the  new 
issue;  he  declares  that  the  French  nation  is  now 
enlightened,  and  says,  "  Deceptive  subtleties  can  no 
longer  deceive  patriots  and  men  of  sense  in  this 
matter."  He  then  goes  on  to  say,  "  We  must  accom- 
plish that  which  we  have  begun,"  and  declared  that 

*  See  Moniteur,  August  27,  1790. 


18  FIAT  MONEY  IN  FRANCE. 

there  must  be  one  more  large  issue  of  paper,  guar- 
anteed by  the  national  lands  and  by  the  good  faith 
of  the  French  nation.  To  show  how  practical  the 
system  is,  he  insists  that  just  as  soon  as  paper  money 
shall  become  too  abundant  it  will  be  absorbed  in 
rapid  purchases  of  national  lands;  and  a  very 
striking  comparison  is  made  between  this  self- 
adjusting,  self-converting  system  and  the  rains  de- 
scending in  showers  upon  the  earth,  then  in  swell- 
ing rivers  discharged  into  the  sea,  then  drawn  up 
in  vapor,  and  finally  scattered  over  the  earth  again 
in  rapidly  fertilizing  showers.  He  predicts  that  the 
members  will  be  surprised  at  the  astonishing  suc^ 
cess  of  this  paper  money,  and  that  there  will  be 
none  too  much  of  it.^ 

His  theory  grows  by  what  it  feeds  upon,  as  the 
paper-money  theory  has  always  done ;  toward  the 
close,  in  a  burst  of  eloquence,  he  suggests  that  as- 
signats  be  created  to  an  amount  sufficient  to  cover 
the  national  debt,  and  that  all  the  national  lands  be 
exposed  for  sale  immediately,  predicting  that  pros- 
perity will  thus  return  to  the  nation,  and  that  all 
classes  will  find  this  additional  issue  of  paper 
money  a  great  blessing. 

This  speech  was  frequently  interrupted  by  ap- 

*  Moniteur,  August  28, 1790, 


FIAT  MONEY  IN  FRANCE.  19' 

plause ;  by  a  unanimous  vote  it  was  ordered  printed, 
and  copies  were  spread  throughout  France.  The 
impulse  given  by  it  can  be  seen  throughout  all  the 
discussion  afterward :  Gouy  arises  and  proposes  to 
liquidate  the  debt  of  twenty-four  hundred  millions, 
to  use  his  own  words,  "  by  one  single  operation — 
grand,  simple,  magnificent "  :  ^  This  operation  is 
the  emission  of  twenty-four  hundred  millions  in 
legal-tender  notes,  and  a  law  that  specie  be  not  ac- 
cepted in  purchasing  national  lands.  His  demagog- 
ism  blooms  forth  magnificently.  He  advocates  an 
appeal  to  the  people,  who,  to  use  his  flattering  ex- 
pression, "  ought  alone  to  give  the  law  in  a  matter 
so  interesting."  The  newspapers  of  the  period, 
in  reporting  his  speech,  note  it  with  the  very  sig- 
nificant remark,  "  This  discourse  was  loudly  ap- 
plauded." 

To  him  replies  Savarin.  He  calls  attention  to 
the  depreciation  of  assignats  already  felt.  He  tries 
to  make  the  Assembly  see  that  natural  laws  work  as 
certainly  in  France  as  elsewhere ;  and  predicts  that 
if  this  new  issue  be  made  there  will  come  a  depre- 
ciation of  thirty  per  cent.  He  is  followed  by  the 
Abbe    Gouttes,    who    declares — what    seems   very 

*  "  Par  une  seule  operation,  grande,  simple,  magnifique " 
(see  Moniteur). 


20  FIAT  MOKEY  IN  FRANCE, 

grotesque  to  those  who  have  read  the  history  of 
an  irredeemable  paper  currency  in  any  country — 
that  new  issues  of  paper  money  "  will  supply  a  cir- 
culating material  which  will  protect  public  morals 
from  corruption."  ^ 

Into  the  midst  of  this  debate  is  brought  a  re- 
port by  Necker.  Most  earnestly  he  endeavors  to 
dissuade  the  Assembly  from  the  proposed  issue  j 
suggests  that  other  means  can  be  found  for  accom- 
plishing the  result,  and  predicts  terrible  evils.  But 
the  current  is  again  running  too  fast.  The  only 
result  is,  that  Necker  is  spurned  as  a  man  of  the 
past.f  He  at  last  sends  in  his  resignation,  and 
leaves  France  forever.  The  paper-money  dema- 
gogues shout  for  joy  at  his  departure ;  their  chorus 
rings  through  the  journalism  of  the  time.  No 
words  can  express  their  contempt  for  a  man  who 
can  not  see  the  advantages  of  filling  the  treasury 
with  the  issues  of  a  printing  press.  Marat,  Hebert, 
and  Camille  Desmoulins,  are  especially  jubilant.:}: 

Continuing  the  debate,  Eewbell  attacks  Necker, 
saying  that  assignats  are  not  at  par  because  there  is 
not  yet  enough  of  them ;  he  insists  that  payments 


*  Moniteur,  August  29,  1790. 

f  See  Ijacretelle,  18™«  SiecJe,  vol.  viii,  pp.  84-87 ;  also  Thiers 
and  Mignet. 

I  See  Hatin,  Histoire  de  la  Presse  en  France,  vols,  v  and  vi. 


FIAT  MONEY  IN  FRANCE.  21 

for  public  lands  be  received  in  assignats  alone  ;  and 
suggests  that  the  church  bells  of  the  kingdom  be 
melted  down  into  small  money.  Le  Brun  attacks 
the  whole  scheme  in  the  Assembly,  as  he  had  done 
in  the  committee ;  declaring  that  the  proposal,  in- 
stead of  relieving  the  nation,  will  wreck  it.  The 
papers  of  the  time  very  significantly  say  that  at  this 
arose  many  murmurs.  Chabroux  comes  to  the 
rescue.  He  says  that  the  issue  of  assignats  will  re- 
lieve the  distress  of  the  people,  and  presents  very 
neatly  the  new  theory  of  paper  money  and  its  basis 
in  the  following  words :  "  The  earth  is  the  source  of 
value ;  you  can  not  distribute  the  earth  in  a  circu- 
lating value,  but  this  paper  becomes  representative 
of  that  value,  and  it  is  evident  that  the  creditors  of 
the  nation  will  not  be  injured  by  taking  it."  On 
the  other  hand,  appeared  in  the  leading  paper,  the 
Moniteur,  a  very  thoughtful  article  against  paper 
money,  which  sums  up  all  by  saying,  "  It  is,  then, 
evident  that  all  paper  which  can  not  at  the  will  of 
the  bearer  be  converted  into  specie  can  not  discharge 
the  functions  of  money."  This  article  goes  on  to 
cite  Mirabeau's  former  opinion  in  his  letter  to 
Cerutti,  published  in  1789 ;  the  famous  opinion  that 
"  paper  money  is  a  nursery  of  tyranny,  corruption, 
and  delusions ;  a  veritable  orgy  of  authority  in  de- 
lirium."     Lablache,  in    the  Assembly,  quotes  the 


22  FIAT  MONEY  IN  FRANCE. 

saying  that  "  paper  money  is  the  emetic  of  great 
states."  ^ 

Boutidoux  follows  in  favor  of  paper  money,  and 
calls  the  assignats  "  un  papier  terre^'^  or  land  con- 
verted into  paper.  Boisandry  answers  vigorously, 
and  foretells  evil  results.  Pamphlets  continue  to  be 
issued,  among  them  one  so  pungent  that  it  is 
brought  into  the  Assembly  and  read  there.  The 
truth  which  it  brings  out  with  great  clearness  is 
that  doubling  the  quantity  of  money  or  substitutes 
for  money  in  a  nation  simply  increases  prices,  dis- 
turbs values,  alarms  capital,  diminishes  legitimate 
enterprise,  and  so  decreases  the  demand  both  for 
products  and  for  labor ;  that  the  only  persons  to  be 
helped  by  it  are  the  rich  who  have  large  debts  to 
pay.  This  pamphlet  was  signed  "  A  Friend  of  the 
People."  It  was  received  with  great  applause  by 
the  thoughtful  part  of  the  Assembly.  Dupont,  who 
had  stood  by  Necker  in  the  debate  on  the  first  issue 
of  assignats,  arises,  avows  the  pamphlet  to  be  his, 
and  says  sturdily  that  he  has  always  voted  against 
the  emission  of  irredeemable  paper  and  always 
will. 

But  far  more  important  than  any  other  argu- 
ment against  inflation  was  the  speech  of  Talleyrand. 

*See  Moniteur,  August  29,  1790. 


FIAT  MONEY  IN  FRANCE.  23 

He  had  been  among  the  boldest  and  most  radical 
French  statesmen.  He  it  was  who,  more  than  any 
other,  had  carried  the  extreme  measure  of  taking 
into  the  possession  of  the  nation  the  great  landed 
estates  of  the  Church.  He  now  adopts  a  judicial 
tone — attempts  to  show  to  the  Assembly  the  very 
simple  truth  that  the  effect  of  a  second  issue  of 
assignats  may  be  different  from  the  first ;  that  the 
first  was  evidently  needed  ;  that  the  second  may  be 
as  injurious  as  the  first  was  useful.  He  exhibits 
various  weak  points  in  the  infiation  fallacies,  and 
presents  forcibly  the  trite  truth  that  no  laws  and  no 
decrees  can  keep  large  issues  of  irredeemable  paper 
at  a  par  with  specie. 

In  his  speech  occur  these  words :  "  You  can,  in- 
deed, arrange  it  so  that  the  people  shall  be  forced 
to  take  a  thousand  francs  in  paper  for  a  thousand 
francs  in  specie;  but  you  can  never  arrange  it  so 
that  a  man  shall  be  obliged  to  give  a  thousand 
francs  in  specie  for  a  thousand  francs  in  paper.  In 
that  fact  is  imbedded  the  entire  question;  and  on 
account  of  that  fact  the  whole  system  fails."  ^ 

The  nation  at  large  now  began  to  take  part  in 
the  debate ;  thoughtful  men  saw  that  here  was  the 


*  See  speech  in  Moniteur ;  also  in  Appendix  to  Thiers's  His- 
tory of  the  French  Revolution. 


24  FIAT  MONEY   IN  FRANCE. 

turning  point  between  good  and  evil ;  that  the  na- 
tion stood  at  the  parting  of  the  ways.  Most  of  the 
great  commercial  cities  bestirred  themselves  and 
sent '  up  remonstrances  against  the  new  emission, 
twenty-five  being  opposed  and  seven  in  favor  of  it. 
But  on  September  27,  1790,  came  Mirabeau's  great 
final  speech.  In  this  he  dwelt  first  on  the  political 
necessity  involved,  declaring  that  the  most  pressing 
need  was  to  get  the  Government  lands  into  the 
hands  of  the  people,  and  so  to  commit  the  class  of 
landholders  thus  created  to  the  nation,  and  against 
the  old  privileged  classes. 

Through  the  rest  of  the  speech  there  is  one 
leading  point  enforced  with  all  his  eloquence  and 
ingenuity — the  thorough  excellence  of  the  proposed 
currency  and  the  stability  of  its  security.  He  de- 
clares that,  being  based  on  the  pledge  of  public 
lands,  and  convertible  into  them,  the  notes  are  bet- 
ter secured  than  if  redeemable  in  specie ;  that  the 
precious  metals  are  only  employed  in  the  secondary 
arts,  while  the  French  paper  money  represents  the 
first  and  most  real  of  all  property,  the  source  of  all 
production,  the  land  itself ;  that,  while  other  na- 
tions have  been  obliged  to  emit  paper  money,  none 
has  ever  been  so  fortunate  as  the  French  nation,  for 
none  has  ever  before  been  able  to  give  landed  se- 
curity for  its  paper ;  that  whoever  takes  French 


FIAT   MONEY  IN  FRANCE.  25 

paper  money  has  practically  a  mortgage  to  secure 
it,  on  landed  property  which  can  be  easily  sold  to 
satisfy  his  claims,  wjiile  other  nations  liave  only 
been  able  to  give  a  vague  claim  on  the  entire  na- 
tion. "  And,"  he  cries,  "  I  would  rather  have  a 
mortgage  on  a  garden  than  on  a  kingdom ! " 

Other  arguments  of  his  are  more  demagogical. 
He  declares  that  the  only  interests  affected  will  be 
those  of  bankers  and  capitalists,  but  that  manufac- 
turers will  see  prosperity  restored  to  them.  Some' 
of  his  arguments  seem  almost  puerile,  as  when  he 
says,  "  If  gold  has  been  hoarded  through  timidity  or 
malignity,  the  issue  of  paper  will  show  that  gold  is 
not  necessary,  and  it  will  then  come  forth."  But  as 
a  whole  the  speech  was  brilliant ;  it  was  often  inter- 
rupted by  applause ;  it  settled  the  question.  People 
did  not  stop  to  consider  that  it  was  the  dashing 
speech  of  a  bold  orator,  and  not  the  matured  judg- 
ment of  an  expert  in  finance  ;  they  did  not  see  that 
calling  Mirabeau  to  decide  upon  a  financial  policy, 
because  he  had  shown  boldness  in  danger  and  strength 
in  conflict,  was  like  calling  a  successful  blacksmith 
to  mend  a  watch. 

In  vain  did  Maury  show  that,  while  the  first  issues 
of  John  Law's  paper  had  brought  apparent  prosperity, 
those  that  followed  brought  certain  misery ;  in  vain 
did  he  quote  from  a  book  published  in  John  Law's 


26  FIAT  MONEY  IN  FRANCE. 

time,  showing  that  Law  was  at  first  considered  a  pa- 
triot and  friend  of  humanity ;  in  vain  did  he  hold  up 
to  the  Assembly  one  of  Law's  bills,  and  appeal  to  their 
memories  of  the  wretchedness  brought  on  France 
by  them ;  nothing  could  resist  the  eloquence  of 
Mirabeau.  Barnave  follows;  says  that  "Law's  pa- 
per w^as  based  upon  the  phantoms  of  the  Mississippi; 
ours  upon  the  solid  basis  of  ecclesiastical  lands,"  and 
proves  that  the  assignats  can  not  depreciate  further. 
Prudhomme's  newspaper  pours  contempt  over  gold 
as  security  for  the  currency,  extols  real  estate  as  the 
only  true  basis,  and  is  fervent  in  praise  of  the  con- 
vertibility and  self-adjusting  features  of  the  pro- 
posed scheme.  In  spite  of  all  this  plausibility  and 
eloquence,  a  large  minority  stood  firm  to  their  ear- 
lier principles ;  but  on  the  29th  of  September,  by  a 
vote  of  508  to  423,  the  deed  was  done ;  a  bill  was 
passed  authorizing  the  issue  of  eight  hundred  mil- 
lions of  new  assignats,  but  solemnly  declaring  that 
in  no  case  should  the  entire  amount  put  in  circu- 
lation exceed  twelve  hundred  millions.  To  make 
assurance  doubly  sure,  it  also  provided  that,  as  fast 
as  the  assignats  were  paid  into  the  treasury  for  land, 
they  should  be  burned ;  and  thus  a  healthful  con- 
traction be  constantly  maintained. 

Great  were  the  plaudits  of  the  nation  at  this  re- 
lief.   Rejoicings  were  heard  on  every  side.    Among 


FIAT  MONEY  IN  FRANCE.  27 

the  multitudes  of  pamphlets  expressing  this  joy 
which  have  come  down  to  us,  the  "  Friend  of  the 
Revolution  "  is  the  most  interesting.  It  begins  as 
follows :  "  Citizens,  the  deed  is  done.  The  assignats 
are  the  keystone  of  the  arch.  It  has  just  been  hap- 
pily put  in  position.  Now  I  can  announce  to  you 
that  the  Eevolution  is  finished,  and  there  only  re- 
main one  or  two  important  questions.  All  the  rest 
is  but  a  matter  of  detail  which  can  not  deprive  us 
any  longer  of  the  pleasure  of  admiring  in  its  entirety 
this  important  work.  The  provinces  and  the  com- 
mercial cities  which  were  at  first  alarmed  at  the 
proposal  to  issue  so  much  paper  money,  now  send 
expressions  of  their  thanks ;  specie  is  coming  out  to 
be  joined  with  paper  money.  Foreigners  come  to 
us  from  all  parts  of  Europe  to  seek  their  happiness 
under  laws  which  they  admire ;  and  soon  France, 
enriched  by  her  new  property  and  by  the  national 
industry  which  is  preparing  for  fruitfulness,  will 
demand  still  another  creation  of  paper  money." 

To  make  these  prophecies  good,  every  means 
was  taken  to  keep  up  the  credit  of  this  second  issue 
of  assignats.  Among  the  multitudes  of  pamphlets 
issued  for  this  purpose  was  one  by  Royer ;  it  ap- 
peared September  14,  1790,  and  was  entitled  Re- 
flections of  a  Patriotic  Citizen  upon  the  Emission 

of  Assignats.     In  this  Royer  gives  many  excellent 
8 


28  FIAT  MONEY  IN  FRANCE. 

reasons  why  the  assignats  can  not  be  depressed; 
and  speaks  of  the  argument  against  them  as  "  vile 
clamors  of  people  bribed  to  a£Eect  public  opinion." 
He  sajs  to  the  National  Assembly,  ''If  it  is  neces- 
sary to  create  five  thousand  millions  and  more  of 
this  paper,  decree  such  a  creation  gladly."  He, 
too,  predicts,  as  Mirabeau  and  others  had  done,  the 
time  when  gold  will  lose  all  its  value,  since  all  ex- 
changes will  be  made  with  this  admirably  guaran- 
teed paper,  and  therefore  that  coin  will  come  out 
from  the  places  where  it  is  hoarded.  He  foretells 
prosperous  times  to  France  in  case  these  great 
issues  of  paper  are  continued,  and  declares  this 
"the  only  means  to  insure  happiness,  glory,  and 
liberty,  to  the  French  nation." 

France  was  now  fully  committed  to  a  policy  of 
inflation ;  and,  if  there  had  been  any  doubt  of  this 
before,  it  was  soon  proved  by  an  act  of  the  Gov- 
ernment, very  plausible,  but  none  the  less  signifi- 
cant, as  showing  the  exceeding  difiiculty  of  stopping 
a  nation  once  in  the  full  tide  of  a  depreciated  cur- 
rency. The  old  cry  of  the  "  lack  of  a  circulating 
medium"  broke  forth  again;  and  especially  loud 
were  the  clamors  for  more  small  bills.  This  re- 
sulted in  an  evasion  of  the  solemn  pledge  that  the 
circulation  should  not  go  above  twelve  hundred 
millions,   and    that    all   assignats   returned   to   the 


FIAT  MONEY  IN  FRANCE.  29 

treasury  for  land  should  immediately  be  burned. 
"Within  a  short  time  there  had  been  received  into 
the  treasury  for  lands  one  hundred  and  sixty  mil- 
lion francs  in  paper.  By  the  terms  of  the  previous 
acts  this  amount  ought  to  have  been  retired.  In- 
stead of  this,  under  the  plea  of  necessity,  one  hun- 
dred millions  were  reissued  in  the  form  of  small 
notes.^ 

Yet  this  was  but  as  a  drop  of  cold  water  to  a 
parched  throat.  Although  there  was  already  a  rise 
in  prices  which  showed  that  the  amount  needed  for 
circulation  had  been  exceeded,  the  cry  for  "  more 
circulating  medium  "  was  continued.  The  pressure 
for  new  issues  became  stronger  and  stronger.  The 
Parisian  populace  and  the  Jacobin  Club  were  espe- 
cially loud  in  their  demands  for  them ;  and  a  few 
months  later,  on  June  19,  1791,  with  few  speeches, 
in  a  silence  very  ominous,  a  new  issue  was  made  of 
six  hundred  millions  more ;  less  than  nine  months 
after  the  former  great  issue,  with  its  solemn  pledges 
as  to  keeping  down  the  amount  in  circulation. 
"With  the  exception  of  a  few  thoughtful  men,  the 
whole  nation  again  sang  peeans. 

In  this  comparative  ease  of  a  new  issue  is  seen 
the  action  of  a  law  in  finance  as  certain  as  the  action 

*  See  Von  Sybel,  History  of  the  Revolution,  vol.  i,  p.  265. 


3p  FIAT   MONEY  IN  FRANCE. 

of  a  similar  law  in  natural  philosophy.  If  a  mate- 
rial body  fall  from  a  heiglit,  its  velocity  is  accel- 
erated, by  a  well-known  law  in  physics,  in  a  con- 
stantly increasing  ratio  :  so  in  issues  of  irredeemable 
currency,  in  obedience  to  the  theories  of  a  legisla- 
tive body,  or  of  the  people  at  large^  there  is  a  natu- 
ral law  of  rapidly  increasing  issue  and  depreciation. 
The  first  inflation  bill  was  passed  with  great  difli- 
culty,  after  a  very  sturdy  resistance,  and  by  a  ma- 
jority of  a  few  score  out  of  nearly  a  thousand 
votes;  but  you  observe  now  that  new  inflation 
measures  are  passed  more  and  more  easily,  and  you 
will  have  occasion  to  see  the  working  of  this  same 
law  in  a  more  striking  degree  as  this  history  de- 
velops itself. 

Nearly  all  Frenchmen  now  became  desperate 
optimists,  declaring  that  inflation  is  prosperity. 
Throughout  France  there  came  temporary  good 
feeling.  The  nation  was  becoming  fairly  inebriated 
with  paper  money.  The  good  feeling  was  that  of  a 
drunkard  after  his  draught ;  and  it  is  to  be  noted,  as 
a  simple  historical  fact,  corresponding  to  a  physio- 
logical fact,  that,  as  the  draughts  of  paper  money 
came  faster,  the  periods  of  succeeding  good  feeling 
grew  shorter. 

Various  bad  signs  had  begun  to  appear.  Imme- 
diately after  this  last  issue  came  a  depreciation  of 


FIAT  MONEY  IN  FRANCE.  31 

from  eight  to  ten  per  cent ;  but  it  is  very  curious 
to  note  the  general  rekictance  to  assign  the  right 
reason.  The  decline,  in  the  purchasing  power  of 
paper  money  was  in  obedience  to  one  of  the  sim- 
plest laws  in  social  physics;  but  France  had  now 
gone  beyond  her  thoughtful  statesmen,  and  took 
refuge  in  unwavering  optimism ;  giving  any  ex- 
planation of  the  new  difficulties  rather  than  the 
right  one.  A  leading  member  of  the  Assembly  in- 
sisted, in  an  elaborate  speech,  that  the  cause  of  de- 
preciation was  simply  want  of  knowledge  and  of 
confidence  among  the  rural  population,  and  pro- 
posed means  of  enlightening  them.  La  Rochefou- 
cauld proposed  to  issue  an  address  to  the  people, 
showing  the  goodness  of  the  currency  and  the 
absurdity  of  preferring  coin.  The  address  was 
unanimously  voted.  As  well  might  they  have  at- 
tempted to  show  that,  if,  from  the  liquid  made 
up  by  mixing  a  quart  of  wine  and  two  quarts  of 
water,  a  gill  be  taken,  this  gill  will  possess  all 
the  exhilarating  value  of  the  original,  undiluted 
beverage. 

Attention  was  next  aroused  by  another  menacing 
fact — specie  was  fast  disappearing.  The  explana- 
tions for  this  fact  also  displayed  wonderful  ingenu- 
ity in  finding  false  reasons  and  evading  the  true  one. 
A  very  common  explanation  may  be  f  pund  in  Prud- 


32  FIAT  MONEY  IN  FRANCE. 

homme's  newspaper,  Les  Eevolutions  de  Paris,  of 
January  17,  1Y91,  which  declared  that  "coin  will 
keep  rising  until  the  people  have  hung  a  broker."  * 
Another  popular  theory  was  that  the  Bourbon  fam- 
ily were  in  some  miraculous  way  drawing  off  all 
solid  money  to  the  chief  centers  of  their  intrigues 
in  Germany.f 

Still  another  favorite  idea  was  that  English  emis- 
saries were  in  the  midst  of  the  people,  instilling  no- 
tions hostile  to  paper.  Great  efforts  were  made  to 
find  these  emissaries,  and  more  than  one  innocent 
person  experienced  the  popular  wrath,  under  the 
supposition  that  he  was  engaged  in  raising  gold  and 
depressing  paper.:!:  Even  Talleyrand,  shrewd  as  he 
was,  insisted  that  the  cause  was  simply  that  the  im- 
ports were  too  great  and  the  exports  too  little.*  As 
well  might  he  explain  the  fact  that,  when  oil  is  min- 
gled with  water,  water  sinks  to  the  bottom,  by  say- 
ing that  it  is  because  the  oil  rises  to  the  top.  This 
disappearance  of  specie  was  the  result  of  a  natural 
law  as  simple  and  sure  in  its  action  as  gravitation  : 
the  superior  currency  had  been  withdrawn  because 

*  See  also  De  Goncourt,  Societe  Fran9aise,  for  other  explana- 
tions. 

f  See  Les  Revolutions  de  Paris,  vol.  ii,  p.  216. 
t  See    Challamel,  Les  Fran^ais   sous  la  Revolution ;   also 
Senior,  On  Some  Effects  of  Paper  Money,  p.  83, 

*  See  Buohez  and  Roux,  vol.  x,  p.  216. 


FIAT  MONEY  IN  FRANCE.  33 

an  inferior  could  be  used.*  Some  efforts  were 
made  to  remedy  this.  In  the  municipality  of 
Quilleboeuf  the  sum  of  817  marks  in  specie  having 
been  found  in  the  possession  of  a  citizen,  the  money 
was  seized  and  sent  to  the  Assembly.  The  good 
people  of  that  town  treated  this  hoarded  gold  as  the 
result  of  some  singularly  unpatriotic  wickedness  or 
madness,  instead  of  seeing  that  it  was  but  the  sure 
result  of  a  law,  working  in  every  land  and  time, 
when  certain  causes  are  present.  Marat  followed 
out  this  theory  by  asserting  that  death  was  the 
proper  penalty  for  persons  who  thus  hid  their 
money.  In  order  to  supply  the  specie  required  a 
great"  number  of  church  bells  were  melted  down ; 
but  this  also  proved  inadequate. 

Still  another  troublesome  fact  began  now  to 
appear.  Though  paper  money  had  increased  in 
amount,  prosperity  had  steadily  diminished.  In 
spite  of  all  the  paper  issues  business  activity  grew 
more  and  more  spasmodic.  Enterprise  was  chilled, 
and  stagnation  had  set  in.  Mirabeau,  in  his  speech 
which  decided  the  second  great  issue  of  paper,  had 
insisted  that,  though  bankers  might  suffer,  this  issue 
would  be  of  great  service  to  manufacturers  and  re- 

*  For  an  admirable  statement  and  illustration  of  the  general 
action  of  this  law,  see  Sumner,  History  of  American  Currency, 
pp.  157, 158 ;  also  Jevons,  on  Money,  p,  80, 


34  FIAT   MONEY  IN  FRANCE. 

store  their  prosperity.  The  manufacturers  were  for 
a  time  deluded,  but  were  at  last  rudely  awakened 
from  their  delusions.  The  plenty  of  currency  had 
at  first  stimulated  production  and  created  a  great 
activity  in  manufactures,  but  soon  the  markets  were 
glutted,  and  the  demand  was  vastly  diminished.  In 
spite  of  the  wretched  financial  policy  of  years  gone 
by,  and  especially  in  spite  of  the  Edict  of  Nantes,  by 
which  religious  bigotry  had  driven  out  of  the  king- 
dom thousands  of  its  most  skillful  workmen,  the 
manufactures  of  France  had  before  the  Eevolution 
come  into  full  bloom.  In  the  finer  woolen  and  cot- 
ton goods,  in  silk  and  satin  fabrics  of  all  sorts,  in 
choice  pottery  and  porcelain,  in  manufactures  of 
iron,  steel,  and  copper,  they  had  again  taken  their 
old  place  upon  the  Continent.  All  the  previous 
changes  had,  at  the  worst,  done  no  more  than  to 
inflict  a  momentary  check  on  this  highly  developed 
system  of  manufactures ;  but  what  the  bigotry  of 
Louis  XIV  and  the  shiftlessness  of  Louis  XV  could 
not  do  in  nearly  a  century  was  accomplished  by  this 
tampering  with  the  currency  in  a  few  months.  One 
manufactory  after  another  stopped.  At  one  town, 
Lodeve,  five  thousand  workmen  were  discharged 
from  the  cloth  manufactories.  Every  cause  except 
the  right  one  was  assigned  for  this.  Heavy  duties 
were  put  upon  foreign  goods.     Everything  that  tar- 


FIAT  MONEY  IN  FRANCE.  ^        35 

iffs  and  customhouses  could  do  was  done.  Still  the 
great  manufactories  of  Normandy  were  closed,  those 
\)f  the  rest  of  the  kingdom  speedily  followed,  and 
V*dst  numbers  of  workmen  in  all  parts  of  the  country 
were  thrown  out  of  employment.*  Nor  was  this 
the  case  alone  in  regard  to  home  demand.  The  for- 
eign demand,  which  had  been  at  first  stimulated, 
soon  fell  off.  In  no  way  can  this  be  better  stated 
than  by  one  of  the  most  thoughtful  historians  of 
modern  times  :  "  It  is  true  that  at  first  the  assignats 
gave  the  same  impulse  to  business  in  the  city  as  in 
the  country,  but  the  apparent  improvement  had  no 
firm  foundation  even  in  the  towns.  Whenever  a 
great  quantity  of  paper  money  is  suddenly  issued 
we  invariably  see  a  rapid  increase  of  trade.  The 
great  quantity  of  the  circulating  medium  sets  in 
motion  all  the  energies  of  commerce  and  manufac- 
tures; capital  for  investment  is  more  easily  found 
than  usual,  and  trade  perpetually  receives  fresh 
nutriment.  If  this  paper  represents  real  credit, 
founded  upon  order  and  legal  security,  from  which 
it  can  derive  a  firm  and  lasting  value,  such  a  move- 
ment may  be  the  starting  point  of  a  great  and  widely 
extended  prosperity,  as,  for  instance,  the  most  splen- 
did improvements  in  English  agriculture  were  un- 

*  See  De  Gonoourt,  Societe  Fran9aise,  p.  214. 


36  FIAT  MONEY  IN  FRANCE. 

doubtedly  owing  to  the  emancipation  of  the  country 
bankers.  If,  on  the  contrary,  the  new  paper  is  of 
precarious  value,  as  was  clearly  seen  to  be  the  case 
with  the  French  assignats  as  early  as  February,  1Y91, 
it  can  have  no  lasting,  beneficial  fruits.  For  the 
moment,  perhaps,  business  receives  an  impulse,  all 
the  more  violent  because  every  one  endeavors  to  in- 
vest his  doubtful  paper  in  buildings,  machines,  and 
goods,  which  under  all  circumstances  retain  some 
intrinsic  value.  Such  a  movement  was  witnessed  in 
France  in  1791,  and  from  every  quarter  there  came 
satisfactory  reports  of  the  activity  of  manufactures. 
"  But,  for  the  moment,  the  French  manufacturers 
derived  great  advantage  from  this  state  of  things. 
As  their  products  could  be  so  cheaply  paid  for, 
orders  poured  in  from  foreign  countries  to  such  a 
degree  that  it  was  often  difficult  for  the  manufac- 
turers to  satisfy  their  customers.  It  is  easy  to  see 
that  prosperity  of  this  kind  must  very  soon  find  its 
limit.  .  .  .  When  a  further  fall  in  the  assignats  took 
place  it  would  necessarily  collapse  at  once,  and  be 
succeeded  by  a  crisis  all  the  more  destructive  the 
more  deeply  men  had  engaged  in  speculation  under 
the  influence  of  the  first  favorable  prospects."  * 


*  See  Von  Sybel,  History  of  the  French  Revohition,  vol.  i, 
pp.  281,  283. 


FIAT  MONEY  IN  FRANCE.  37 

Thus  came  a  collapse  in  manufacturing  and  com- 
merce, just  as  it  had  come  before  in  France ;  just  as 
it  came  afterward  in  Austria,  Eussia,  America,  and 
in  all  other  countries  where  men  have  tried  to  build 
up  prosperity  on  irredeemable  paper.* 

All  this  breaking  down  of  the  manufactures  and 
commerce  of  the  nation  made  fearful  inroads  on  the 
greater  fortunes ;  but  upon  the  lesser  fortunes,  and 
the  little  accumulated  properties  of  the  masses  of  the 
nation  who  relied  upon  their  labor,  it  pressed  with 
intense  severity. 

Still  another  difficulty  appeared.  There  had 
come  a  complete  uncertainty  as  to  the  future.  In 
the  spring  of  1791  no  one  knew  whether  a  piece 
of  paper  money  representing  a  hundred  francs 
would,  a  month  later,  have  a  purchasing  power  of  a 
hundred  francs,  or  ninety  francs,  or  eighty,  or  sixty. 
The  result  was  that  capitalists  feared  to  embark  their 
means  in  business.  Enterprise  received  a  mortal 
blow.     Demand  for  labor  was  still  further  dimin- 


*  For  proofs  that  issues  of  irredeemable  paper  at  first  stimu- 
lated manufactures  and  commerce  in  Austria,  and  afterward 
ruined  them,  see  Storch's  ficonomie  Politique,  vol.  iv,  p.  223, 
note ;  and  for  the  same  effect  produced  by  the  same  causes  in 
Russia,  see  ibid.,  end  of  vol.  iv.  For  the  same  effects  in  Ameri- 
ca, see  Sumner's  History  of  American  Currency.  For  general 
statement  of  effect  of  inconvertible  issues  on  foreign  exchanges, 
see  McLeod  on  Banking,  p.  186. 


38  FIAT  MONEY  IN  FRANCE. 

ished  ;  and  here  came  an  additional  cause  of  misery. 
By  this  uncertainty  all  far-reaching  undertakings 
were  killed.  The  business  of  France  dwindled  into 
a  mere  living  from  hand  to  mouth.  This  state  of 
things,  too,  while  it  bore  heavily  against  the  inter- 
ests of  the  moneyed  classes,  was  still  more  ruinous 
to  those  in  more  moderate  and,  most  of  all,  to  those 
in  straitened  circumstances.  With  the  masses  of 
the  people,  the  purchase  of  every  article  of  supply 
became  a  speculation — a  speculation  in  which  the 
professional  speculator  had  an  immense  advantage 
over  the  ordinary  buyer.  Says  the  most  brilHant 
of  apologists  for  French  revolutionary  statesman- 
ship, "  Commerce  was  dead ;  betting  took  its  place."* 

Nor  was  there  any  compensating  advantage  to 
the  mercantile  classes.  The  merchant  was  forced  to 
add  to  his  ordinary  profit  a  sum  sufficient  to  cover 
probable  or  possible  fiuctuations  in  value.  And 
while  prices  of  products  thus  went  higher,  tlie  wages 
of  labor,  owing  to  the  number  of  workmen  who 
were  thrown  out  of  employ,  went  lower. 

But  these  evils,  though  very  great,  were  small 
compared  to  those  far  more  deep-seated  signs  of 
disease  which  now  showed  themselves  throughout 

*  See  Louis  Blanc,  Histoire  de  la  Revolution  Fran§aise,  tome 
xii,  p.  113. 


FIAT  MONEY  IN  FRANCE.  39 

the  country.  The  first  of  these  was  the  obliteration 
of  thrift  in  the  minds  of  the  French  people.  The 
French  are  naturally  a  thrifty  people ;  but,  with 
such  masses  of  money  and  with  such  uncertainty  as 
to  its  future  value,  the  ordinary  motives  for  saving 
and  care  diminished,  and  a  'loose  luxury  spread 
throughout  the  country.  A  still  worse  outgrowth 
of  this  feeling  was  the  increase  of  speculation  and 
gambling.  With  the  plethora  of  paper  currency 
in  1791  appeared  the  first  evidences  of  that  cancer- 
ous disease  which  always  follows  large  issues  of  irre- 
deemable currency — a  disease  more  permanently  in- 
jurious to  a  nation  than  war,  pestilence,  or  famine. 
At  the  great  metropolitan  centers  grew  a  luxurious, 
speculative,  stock-gambling  body,  which,  like  a  ma- 
lignant tumor,  absorbed  into  itself  the  strength  of 
the  nation,  and  sent  out  its  cancerous  fibers  to  the 
remotest  hamlets.  At  these  city  centers  abundant 
wealth  was  piled  up.  In  the  country  at  large  there 
grew  dislike  of  steady  labor  and  contempt  for  mod- 
erate gains  and  simple  living.  In  a  pamphlet  pub- 
lished May,  1791,  we  see  how,  in  regard  to  this  also, 
public  opinion  was  blinded.  The  author  calls  atten- 
tion to  the  frightful  increase  of  gambling  in  values 
of  all  sorts  in  these  words :  "  What  shall  I  say  of 
the  stockjobbing,  as  frightful  as  it  is  scandalous, 
which  goes  on  in  Paris  under  the  very  eyes  of  our 


40  FIAT  MONEY  l^  FRANCE. 

legislators,  a  most  terrible  evil,  yet  under  the  present 
circumstances  a  necessary  evil  ? "  The  author  also 
speaks  of  these  stock  gamblers  as  using  the  most  in- 
sidious means  to  influence  public  opinion  in  favor 
of  their  measures ;  and  then  proposes,  seriously,  a 
change  in  various  matters  of  detail,  thinking  that 
this  would  prove  a  suflicient  remedy  for  an  evil 
which  had  its  roots  far  down  in  the  whole  system  of 
irredeemable  currency.*  As  well  might  a  physician 
prescribe  a  pimple  wash  for  a  diseased  liver. 

Now  began  to  be  seen  more  plainly  some  of  the 
many  ways  in  which  an  inflation  policy  robs  the 
working  classes.  As  these  knots  of  plotting  schem- 
ers at  the  city  centers  were  becoming  bloated  with 
sudden  wealth,  the  producing  classes  of  the  country, 
though  having  in  their  possession  more  and  more 
currency,  grew  lean.  In  the  schemes  and  specula- 
tions put  forth  by  stockjobbers,  and  stimulated  by 
the  printing  of  more  currency,  multitudes  of  small 
fortunes  throughout  the  country  were  absorbed,  and, 
while  these  many  small  fortunes  were  lost,  a  few 
swollen  fortunes  were  rapidly  aggregated  in  the 
city  centers.  This  crippled  a  large  class  in  the 
country  districts,  which  had  employed  a  great  num- 

*  See  Extrait  du  Registre  des  Deliberations  de  la  Section  de 
la  Bibliotheque,  May  3,  1791,  pp.  4,  5. 


FIAT  MONEY  IN  FRANCE.  41 

ber  of  workmen  ;  and  created  a  small  class,  in  the 
cities,  which  employed  a  great  number  of  lackeys. 

In  the  cities  now  arose  a  luxury  and  license  which 
is  a  greater  evil  even  than  the  plundering  which 
ministers  to  it.  In  the  country  the  gambling  spirit 
spread  more  and  more.  Says  the  same  thoughtful 
historian  whom  I  have  already  quoted :  "  What  a 
prospect  for  a  country  when  its  rural  population 
was  changed  into  a  great  band  of  gamblers ! "  *    ^ 

Nor  was  this  reckless  and  corrupt  spirit  confined 
to  business  men ;  it  began  to  break  out  in  official 
circles,  and  public  men  who,  a  few  years  before,  had 
been  pure  in  motive  and  above  all  probability  of 
taint,  became  luxurious,  reckless,  cynical,  and  finally 
corrupt.  Mirabeau  himself,  who,  not  many  months 
before,  had  risked  imprisonment  and  even  death  to 
establish  constitutional  government,  was  now — at 
this  very  time — secretly  receiving  heavy  bribes : 
when  at  the  downfall  of  the  monarchy,  a  few  years 
later,  the  famous  iron  chest  of  the  Tuileries  was 
opened,  there  were  found  evidences  that,  in  this 
carnival. of  inflation  and  corruption,  Mirabeau  him- 
self had  been  a  regularly  paid  servant  of  the  court.f 


*  Von  Sybel,  vol.  i,  p.  273. 

t  For  general  account,  see  Thiers's  Revolution,  chapter  xiv; 
also  Lacretelle,  vol.  viii,  p.  109 ;  also  Memoirs  of  Mallet  Du  Pan. 
For  a  good  account  of  the  intrigues  between  the  court  and 


42  FIAT  MONEY  IN  FRANCE. 

The  artful  plundering  of  the  people  at  large  was 
bad  enough,  but  worse  still  was  this  growing  cor- 
ruption in  official  and  legislative  circles.  Out  of 
the  speculating  and  gambling  of  the  inflation  period 
grew  luxury,  and  out  of  this  grew  corruption.  It 
grew  as  naturally  as  a  fungus  on  a  muck  heap.  It 
was  first  felt  in  business  operations,  but  soon  began 
to  be  seen  in  the  legislative  body  and  in  journalism. 
Mirabeau  was  by  no  means  the  only  example.  Such 
members  of  the  legislative  body  as  Jullien,  of  Tou- 
louse, Delaunay,  of  Angers,  Fabre  d'Eglantine,  and 
their  disciples,  were  among  the  most  noxious  of 
those  conspiring  by  legislative  action  to  raise  and 
depress  securities  for  stockjobbing  purposes.  Brib- 
ery of  legislators  followed  as  a  matter  of  course. 
Delaunay,  Jullien,  and  Chabot,  accepted  a  bribe  of 
five  hundred  thousand  francs  for  aiding  legislation 
calculated  to  promote  the  purposes  of  certain  stock- 
jobbers. It  is  some  comfort  to  know  that  nearly  all 
concerned  lost  their  heads  for  it.* 

Mirabeau,  and  of  the  prices  paid  him,  see  Reeve,  Democracy  and 
Monarchy  in  France,  vol.  i,  pp.  213-220.  For  a  very  striking 
caricature  published  after  the  iron  chest  in  the  Tuileries  was 
opened,  and  the  evidence  of  bribery  of  Mirabeau  revealed,  see 
Challamel,  Musee  de  la  Revolution  Fran9aise,  vol.  i,  p.  341. 
Mirabeau  is  represented  as  a  skeleton  sitting  on  a  pile  of  letters, 
holding  the  French  crown  in  one  hand  and  a  purse  of  gold  in 
the  other. 

*  Thiers,  chapter  ix. 


FIAT  MONEY  IN   FRANCE.  43 

It  is  true  that  the  number  of  these  corrupt  legis- 
lators was  small,  far  less  than  alarmists  led  the  na- 
tion to  suppose,  but  there  were  enough  to  cause 
widespread  distrust,  cynicism,  and  want  of  faith  in 
any  patriotism  or  any  virtue. 

Even  worse  than  this  was  the  breaking  down  o± 
morals  in  the  country  at  large,  resulting  from  the 
sudden  building  up  of  ostentatious  wealth  in  a  few 
large  cities,  and  the  gambling,  speculative  spirit 
fostered  in  the  small  towns  and  rural  districts. 

Yet  even  a  more  openly  disgraceful  result  of 
this  paper  money  was  to  come,  and  this  was  the 
decay  of  any  true  sense  of  national  honor  or  good 
faith.  The  patriotism  which  the  fear  of  the  abso- 
lute monarchy,  the  machinations  of  a  court  party, 
the  menaces  of  the  army,  and  the  threats  of  all 
monarchical  Europe,  had  been  unable  to  shake,  was 
gradually  disintegrated  by  this  same  stockjobbing, 
speculative  habit  fostered  by  the  new  currency. 
At  the  outset,  in  the  discussions  preliminary  to  the 
first  issue  of  paper  money,  Mirabeau  and  others 
who  had  favored  it  had  insisted  that  patriotism,  as 
well  as  an  enlightened  self-interest,  would  lead  the 
people  to  keep  up  the  value  of  paper  money.  The 
very  opposite  of  this  was  now  found  to  be  the  case. 
There  now  appeared,  as  another  outgrowth  of  this 
disease,  what  has  always  been  seen  under  similar 


44:  FIAT  MONEY  IN  FRANCE. 

circumstances.  It  is  a  result  of  previous  evils  and 
a  cause  of  future  evils.  This  outgrowth  was  the 
creation  of  a  great  debtor  class  in  the  nation,  di- 
rectly interested  in  the  depreciation  of  the  currency 
in  w^hich  their  debts  were  to  be  paid.  The  nucleus 
of  this  debtor  class  was  formed  by  those  who  had 
purcliased  the  church  lands  from  the  Government. 
Only  small  payments  down  had  been  required,  and 
the  remainder  was  to  be  paid  in  small  installments 
spread  over  much  time:  an  indebtedness  had  thus 
been  created,  by  a  large  number  of  people,  to  the 
amount  of  hundreds  of  millions.  This  large  body 
of  debtors,  of  course,  soon  saw  that  their  interest 
was  to  depreciate  the  currency  in  which  their  debts 
were  to  be  paid;  and  soon  they  were  joined  by  a 
far  more  influential  class;  by  that  class  whose 
speculative  tendencies  had  been  stimulated  by  the 
abundance  of  paper  money,  and  who  had  gone 
largely  into  debt,  looking  for  a  rise  in  nominal 
values.  Soon  demagogues  of  the  viler  sort  in  the 
political  clubs  began  to  pander  to  this  debtor  class ; 
soon  important  members  of  this  debtor  class  were 
to  be  found  intriguing  in  the  Assembly — often  on 
the  seats  of  the  Assembly  and  in  places  of  public 
trust.  Before  long,  the  debtor  class  became  a  pow- 
erful body,  extending  through  all  ranks  of  society. 
From  the  stock  gambler  who  sat  in  the  Assembly 


FIAT  MONEY  IN  FRANCE.  45 

to  the  small  land  speculator  in  the  rural  districts; 
from  the  sleek  inventor  of  canards  on  the  Paris 
Exchange  to  the  lying  stockjobber  in  the  market 
town, all  pressed  vigorously  for  new  issues  of  paper; 
all  were  able,  apparently,  to  demonstrate  to  the  peo- 
ple that  in  new  issues  of  paper  lay  the  only  chance 
for  national  prosperity. 

This  great  debtor  class,  relying  on  the  multitude 
who  could  be  approached  by  superficial  arguments, 
soon  gained  control.  Strange  as  it  may  seem,  to 
those  who  have  not  watched  the  same  causes  at 
work  at  a  previous  period  in  France,  and  at  vari- 
ous periods  in  other  countries,  while  every  issue  of 
paper  money  really  made  matters  worse,  a. supersti- 
tion steadily  gained  ground  among  the  people  at 
large  that,  if  only  enough  paper  money  were  issued 
and  more  cunningly  handled,  the  poor  w^ould  be 
made  rich.  Henceforth  all  opposition  was  futile. 
In  December,  1791,  a  report  was  made  in  the  As- 
sembly in  favor  of  a  fourth  great  issue  of  three 
hundred  millions  more  of  paper  money.  In  regard 
to  this  report,  Chambon  says  that  more  money  is 
needed,  but  asks,  "Will  you,  in  a  moment  when 
stockjobbing  is  carried  on  with  such  fury,  give  it 
new  power  by  adding  so  much  more  money  to  the 
circulation?"  But  such  high  considerations  were 
now  little  regarded.     Dorisy  declares  that  "  there  is 


46  FIAT   MONEY  IN  FRANCE. 

not  enough  money  yet  in  circulation ;  that,  if  there 
were  more,  the  sales  of  national  lands  would  be 
more  rapid."  And  the  official  report  of  his  speech 
declares  that  these  ^ords  were  applauded. 

Dorisy  declares  that  the  Government  lands  are 
worth  at  least  thirty-five  hundred  million  francs, 
and  asks :  "  Why  should  members  ascend  the  trib- 
une and  disquiet  France  ?  Fear  nothing ;  your 
currency  reposes  upon  a  sound  mortgage."  Then 
follows  a  glorification  of  the  patriotism  of  the 
French  people,  which,  he  asserts,  will  carry  the 
nation  through  all  its  difficulties. 

Becquet  follows,  declaring  that  the  "  circulation 
is  becoming  more  rare  every  day." 

On  December  17,  1Y91,  a  new  issue  was  or- 
dered of  three  hundred  millions  more,  making 
in  all  twenty-one  hundred  millions  authorized. 
Coupled  with  this  was  the  declaration  that  the 
total  amount  of  circulation  should  never  reach 
more  than  sixteen  hundred  millions.  What  such 
limitations  were  worth  may  be  judged  from  the 
fact  that  not  only  had  the  declaration  made  hardly 
a  year  before,  limiting  the  amount  in  circulation  to 
twelve  hundred  millions,  been  violated,  but  the  dec- 
laration, made  hardly  a  month  before,  in  which  the 
Assembly  had  as  solemnly  limited  the  amount  of  cir- 
culation to  fourteen  hundred  millions,  had  also  been 


FIAT  MONEY  IN  FRANCE.  47 

repudiated.  The  evils  which  we  have  already  seen 
arising  from  the  earlier  issues  were  now  aggravated. 
But  the  most  curious  thing  evolved  out  of  all 
this  chaos  was  a  new  system  of  political  economy. 
In  the  speeches  about  this  time,  Ve  begin  tp  find  it 
declared  that,  after  all,  a  depreciated  currency  is  a 
.blessing;  that  gold  and  silver  form  an  unsatisfac- 
tory standard  for  measuring  values ;  that  it  is  a 
good  thing  to  have  a  currency  that  will  not  go  out 
of  the  kingdom,  and  which  separates  France  from 
other  nations;  that  thus  shall  manufactures  be  en- 
couraged ;  that  commerce  with  other  nations  is  a 
curse,  and  every  hindrance  to  it  a  blessing;  that 
the  laws  of  political  economy,  however  applicable 
in  other  times,  are  not  applicable  to  this  particular 
time,  and,  however  operative  in  other  nations,  are 
not  operative  in  France ;  that  the  ordinary  rules  of 
political  economy  are  perhaps  suited  to  the  minions 
of  despotism,  but  not  to  the  free  and  enlightened 
inhabitants  of  France  at  the  close  of  the  eighteenth 
century ;  that  the  whole  present  state  of  things,  so 
far  from  being  an  evil,  is  a  blessing.  All  these 
ideas,  and  others  quite  as  striking,  are  brought  to  the 
surface  in  the  debates  on  the  various  new  issues.* 

*  See  especially  Discours  de  Fabre  d^Eglantine,  in  Moniteur 
for  August  11,  1793 ;  also  debate  in  Moniteur  of  September  15, 
1793 ;  also  Prudhomme's  Revolutions  de  Paris. 


48  FIAT  MONEY  IN  FRANCE. 

Within  four  months  comes  another  report  to  the 
Assembly  as  ingenious  as  those  preceding.  It  de- 
clares :  "  Your  committee  are  thoroughly  persuaded 
that  the  amount  of  circulating  medium  before  the 
E-evolution  was  greater  than  that  of  the  assignats 
to-day ;  but  then  the  money  circulated  slowly,  and 
now  it  passes  rapidly,  so  that  one  thousand  million 
assignats  do  the  work  of  two  thousand  millions  of 
specie."  Tl^e  report  foretells  further  increase  in 
prices,  but  by  some  curious  jugglery  reaches  a  con- 
clusion favorable  to  further  inflation. 

The  result  was  that  on  April  30,  1792,  came  the 
fifth  great  issue  of  paper  money,  amounting  to  three 
hundred  millions  ;  and  at  about  the  same  time  Cam- 
bon  sneered  ominously  at  public  creditors  as  "  rich 
people,  old  financiers,  and  bankers."  Soon  payment 
was  suspended  on  dues  to  public  creditors  for  all 
amounts  exceeding  ten  thousand  francs. 

This  was  hailed  by  many  as  a  measure  in  the  in- 
terests of  the  poorer  classes  of  people,  but  thc^result 
was  that  it  injured  them  most  of  all.  Hencefor- 
ward, until  the  end  of  this  history,  capital  was  taken 
from  labor  and  locked  up  in  all  the  ways  that  finan- 
cial ingenuity  could  devise.  All  that  saved  thou- 
sands of  laborers  in  France  from  starvation  was  that 
they  were  drafted  off  into  the  army  and  sent  to  be 
killed  on  foreign  battlefields. 


FIAT  MONEY  IN  FRANCE.  49 

In  February,  1792,  assignats  were  over  thirty  per 
cent  below  par.***^ 

On  the  last  day  of  July,  1792,  came  another 
brilliant  report  from  Fouquet,  showing  that  the  to- 
tal amount  already  issued  was  about  twenty-four 
hundred  millions,  but  claiming  that  the  national 
lands  were  worth  a  littk  more  than  this  sum. 
Though  it  was  easy  for  any  shrewd  mind  to  find  out 
the  fallacy  of  this,  a  decree  was  passed  issuing  three 
hundred  millions  more.  By  this  the  prices  of 
everything  were  again  enhanced  save  one  thing,  and 
that  one  thing  was  labor.  Strange  as  it  may  at  first 
appear,  while  all  products  had  been  raised  enor- 
mously in  price  by  the  depreciation  of  the  currency, 
the  stoppage  of  so  many  manufactories,  and  the 
withdrawal  of  capital,  caused  wages  in. the  summer 
of  1792,  after  all  the  inflation,  to  be  as  small  as  they 
had  been  four  years  before — namely,  fifteen  sous 
per  day.f  No  more  striking  example  can  be  seen 
of  the  truth  uttered  by  Daniel  Webster,  that  "  of 
all  the  contrivances  for  cheatino^  the  laboring  class 
of  mankind,  none  has  been  more  effectual  than  that 
which  deludes  them  with  paper  money." 

Issue  after  issue  followed  at  intervals  of  a  few 

*  Von  Sybel,  vol.  i,  pp.  509,  5iO. 

f  See  Von  Sybel,  vol.  i,  p.  515 ;  also  Villeneuve  Bargemont, 
Histoire  de  rfeconomie  Politique,  vol.  ii,  p.  213. 


50  FIAT  MONEY  IN  FRANCE. 

months  until  on  December  14,  1792,  we  have  an 
official  statement  to  the  effect  that  thirtj-four  hun- 
dred millions  had  been  put  forth,  of  which  six  hun- 
dred millions  had  been  burned,  leaving  in  circula- 
tion twenty-eight  hundred  millions.  When  it  is 
remembered  that  there  was  little  business  to  do, 
and  that  the  purchasing  power  of  the  franc^  when 
judged  by  the  staple  products  of  the  country,  was 
about  equal  to  half  the  present  purchasing  power  of 
our  own  dollar,  it  will  be  seen  into  what  evils 
France  had  drifted.^  As  this  mania  for  paper  ran 
its  course,,  even  the  sous,  obtained  by  melting  down 
the  church  bells,  appear  to  have  been  driven  out  of 
circulation ;  parchment  money  from  twenty  sous  to 
five  was  issued,  and  at  last  bills  of  one  sou,  and  even 
of  half  a  sou,  were  put  in  circulation.f 

But  now  another  source  of  wealth  opens  to  the 
nation.  There  comes  a  confiscation  of  the  large 
estates  of  nobles  and  landed  proprietors  who  had 
fled  the  country.  An  estimate  in  1793  makes  the 
vakie  of  these  estates  three  billion  francs.     As  a 

*  As  to  purchasing  power  of  money  at  that  time,  see  Arthur 
Young,  Travels  in  France  during  the  Years  1787,  1788,  and 
1789. 

t  For  notices  of  this  small  currency,  with  examples  of  sa- 
tirical verses  written  upon  it,  see  Challamel,  Les  Frangais  sous 
la  Revolution,"  pp.  307,  308.  See  also  Mercier,  Le  Nouveau 
Paris,  edition  of  1800,  chapter  ccv,  entitled  Parchemin  Monnoie. 


FIAT  MONEY  IN  FRANCE.  51 

consequence,  the  issues  of  paper  money  were  con- 
tinued in  increased  amounts,  on  the  old  theory  that 
they  were  guaranteed  by  the  solemn  pledge  of  these 
lands  belonging  to  Ihe  state.  Early  in  1793  the 
consequences  of  these  overissues  began  to  be  more 
painfully  evident  to  the  people  at  large.  Articles 
of  common  consumption  became  enormously  dear, 
and  the  price  was  constantly  rising.  Orators  in  the 
clubs,  local  meetings,  and  elsewhere,  endeavored  to 
enlighten  people  by  assigning  every  reason  save  the 
true  one.  They  declaimed  against  the  corruption 
of  the  ministry,  the  want  of  patriotism  among  the 
moderates,  the  intrigues  of  the  emigrant  nobles,  the 
hard-heartedness  of  the  rich,  the  monopolizing  spir- 
it of  the  merchants,  the  perversity  of  the  shop  keep- 
ers, and  named  these  as  causes  of  the  diflBculty.* 

The  washerwomen  of  Paris,  finding  soap  so 
dear  that  they  could  scarcely  purchase  it,  insisted 
that  all  the  merchants  who  were  endeavoring  to 
save  something  of  their  little  property  by  refusing 
to  sell  their  goods  for  the  worthless  currency  with 
which  France  was  flooded,  should  be  punished  with 
death ;  the  women  of  the  markets,  and  the  hangers- 
on  of  the  Jacobin  Club,  called  loudly  for  a  law  "  to 

*  For  Chaumette's  brilliant  argument  to  this  effect,  see 
Thiers,  Shoberl's  translation,  published  by  Bentley,  vol.  iii,  p. 
248. 


52  FIAT  MONEY  IN  FRANCE. 

equalize  the  value  of  paper  money  and  silver  coin." 
It  was  also  demanded  that  a  tax  be  laid  especially 
on  the  rich,  to  the  amount  of  four  hundred  million 
francs,  to  buy  bread ;  and  the  National  Convention, 
which  had  now  become  the  legislative  body  of  the 
French  Eepublic,  ordered  that  such  a  tax  be  levied. 
Marat  declared  loudly  that  the  people,  by  hanging 
a  few  shopkeepers  and  plundering  their  stores, 
could  easily  remove  the  trouble.  The  result  was, 
that  on  the  28th  of  February,  1793,  at  eight  o'clock 
in  the  evening,  a  mob  of  men  and  women  in  dis- 
guise began  plundering  the  stores  and  shops  of 
Paris.  At  first  they  demanded  only  bread;  soon 
they  insisted  on  coffee  and  rice  and  sugar ;  at  last 
they  seized  everything  on  which  they  could  lay 
their  hands — cloth,  clothing,  groceries,  and  luxuries 
of  every  kind.  Two  hundred  shops  and  stores 
were  plundered.  This  was  endured  for  six  hours, 
and  finally  order  was  restored  only  by  a  grant  of 
seven  million  francs  to  buy  off  the  mob.  The  new 
political  economy  was  beginning  to  bear  its  fruits. 
One  of  its  minor  growths  appeared  at  the  City  Hall 
of  Paris,  where,  in  response  to  the  complaints  of 
the  plundered  merchants,  Eoux  declared,  in  the 
midst  of  great  applause,  that  "the  shopkeepers 
were  only  giving  back  to  the  people  what  they  had 
hitherto  robbed  them  of." 


FIAT  MONEY  IN  FRANCE.  53 

This  mob  was  thus  bought  off,  but  now  came 
the  most  monstrous  of  all  financial  outgrowths  of 
paper  money,  and  yet  it  was  an  outgrowth  perfectly 
logical.  Maximum  laws  were  passed — laws  making 
the  sales  of  goods  compulsory,  and  fixing  their  price 
in  paper  money.  As  Von  Sybel  declares,  *'  it  w^as 
the  most  comprehensive  attack  on  the  rights  of 
property,  as  far  as  our  historical  knowledge  reaches, 
which  was  ever  made  in  western  Europe — an  attack 
made  in  the  heart  of  a  great  and  civilized  nation, 
and  one  which  was  not  confined  to  the  brains  of  a 
few  idle  dreamers,  but  practically  carried  out  in  all 
its  terrible  consequences.  It  was  made  with  fiery 
fanaticism  and  unbridled  passion,  and  yet  with  sys- 
tematic calculation.  Its  originators — victorious  at 
home  and  abroad — were  perfectly  free  in  their  de- 
liberations, and  did  not  adopt  their  measures  under 
the  pressure  of  necessity  or  despair,  but  from  de- 
liberate choice.  These  are  facts  of  universal  signifi- 
cance, on  which  we  ought  to  fix  our  attention  all 
the  more  earnestly,  because  they  have  been  disre- 
garded, although  they  are  fraught  with  the  most 
important  consequences."  * 

*  See  Von  Sybel,  vol.  iii,  pp.  11, 12.  For  general  statements 
of  theories  underlying  the  maximum,  see  Thiers.  For  a  very 
interesting  picture,  by  an  eyewitness,  of  the  absurditig 
miseries  it  caused,  see  Mercier,  Nouveau  Paris,  ( 


54:  FIAT  MONEY  IN  FRANCE. 

I  have  said  that  these  maximum  laws  were  per- 
fectly logical ;  they  were  so.  Whenever  any  nation 
intrusts  to  its  legislators  the  issue  of  a  currency  not 
based  on  the  idea  of  redemption  in  coin,  it  intrusts 
to  them  the  power  to  raise  or  depress  the  value  of 
every  article  in  the  possession  of  every  citizen. 
Louis  XIY  claimed  that  all  property  in  France 
was  his  own,  and  that  what  private  persons  held  was 
as  much  his  as  if  it  were  in  his  coffers.*  But  even 
this  falls  short  of  the  reality  of  the  confiscating 
power  exercised  in  a  country  where,  instead  of  leav- 
ing values  to  be  measured  by  a  standard  common  to 
the  whole  world,  they  are  left  to  be  depressed  or 
raised  at  the  whim,  caprice,  or  interest  of  a  body  of 
legislators.f  When  this  power  is  given,  the  power 
of  fixing  prices  is  naturally  included  in  it,  as  the 
less  is  included  in  the  greater. 

chapter  xliv.  For  summary  of  the  Report  of  the  Committee, 
with  list  of  articles  embraced  under  it,  and  for  various  interest- 
ing details,  see  Villeneuve  Bargemont,  Histoire  de  I'Economie 
Politique,  vol.  ii,  pp.  213-239.  For  curious  examples  of  severe 
penalties  for  very  slight  infringements  of  the  law  on  the  sub- 
ject, see  Louis  Blanc,  Histoire  de  la  Revolution  Fran9aise,  tome 
X,  p.  144. 

*  See  Memoirs  of  Louis  XIV  for  the  Instruction  of  the  Dau- 
phin. 

f  For  a  simple  exposition  of  the  way  in  which  the  exercise 
of  this  power  became  simply  confiscation  of  all  private  property 
in  France,  see  Mallet  Du  Pan's  Memoirs,  London,  1852,  vol.  11, 
p.  14. 


FIAT   MONEY  IN  FRANCE.  55 

The  first  result  of  the  maximum  was  that  every 
means  was  taken  to  evade  the  fixed  price  imposed ; 
the  farmers  brought  in  as  little  produce  as  they 
possibly  could.  This  caused  scarcity,  and  the  peo- 
ple of  the  large  cities  were  put  on  an  allowance. 

Tickets  were  issued  authorizing  the  bearer  to 
obtain  at  the  maximum  prices  a  certain  amount  of 
bread,  or  sugar,  or  soap,  or  wood,  or  coal,  to  cover 
immediate  necessities.  * 

It  may  be  said  that  these  measures  were  the 
result  of  the  war  then  going  on.  Nothing  could  be 
more  baseless  than  such  an  objection.  The  war 
was  generally  successful.  It  was  pushed  mainly 
upon  foreign  soil.  Numerous  contributions  were 
levied  upon  the  subjugated  countries  to  support  the 
French  armies.  The  war  was  one  of  those  of  which 
the  loss,  falling  apparently  upon  future  generations, 
stimulates,  in  a  sad  way,  trade  and  production  in  the 
generation  in  being.  The  main  cause  of  these  evils 
was  the  old  false  system  of  confiscating  the  prop- 
erty of  an  entire  nation ;  keeping  all  values  in  fluc- 
tuation ;  discouraging  all  enterprise ;  paralyzing  all 
energy ;  undermining  sober  habits ;  obliterating 
thrift;  promoting  extravagance  and  wild  riot,  by 
the  issue  of  an  irredeemable  currency. 

*  See  specimens  of  these  tickets  in  A.  D.  W.  Collection. 


5G  FIAT  MONEY  IN  FRANCE. 

It  has  also  been  argued  that  the  assignats  sank 
in  value  because  they  were  not  well  secured — that 
securing  them  on  Government  real  estate  was  as 
futile  as  if  the  United  States  were  to  secure  notes 
on  its  real  estate  in  distant  Territories.  This  objec- 
tion is  utterly  fallacious.  The  Government  lands 
of  our  own  country  are  remote  from  the  centers  of 
capital,  and  difficult  to  examine :  the  French  na- 
tional real  estate  was  near  those  centers — even  in 
them — and  easy  to  examine.  Our  national  real 
estate  is  unimproved  and  unproductive :  theirs  was 
improved  and  productive ;  the  average  productive- 
ness of  that  in  market  was  quite  five  per  cent,  in 
ordinary  times."^ 

It  has  also  been  objected  that  the  attempt  to 
secure  the  assignats  on  Government  real  estate 
failed  because  of  the  general  want  of  confidence  in 
the  title  derived  by  the  purchasers  from  the  new 
Government.  Every  thorough  student  of  that 
period  must  know  that  this  is  a  misleading  state- 
ment. Everything  shows  that  the  French  people 
generally  had  the  most  unwavering  confidence  in 
the  stability  of  the  new  Government  during  the 


*  Louis  Blanc  calls  attention  to  this  very  fact  in  showing 
the  superiority  of  the  French  assignats  to  our  Continental  cur- 
rency. See  Louis  Blanc,  Histoire  de  la  Revolution  Fran9aise, 
tome  xii,  p.  98. 


FIAT   MONEY  IN  FRANCE.  57 

greater  part  of  the  Eevolution.  There  were  disbe- 
lievers in  the  perpetuity  of  it,  just  as  there  were 
disbelievers  in  the  perpetuity  of  the  United  States 
throughout  our  recent  civil  war;  but  they  were  a 
small  minority.  Even  granting  that  there  was  a 
doubt  as  to  investment  in  French  lands,  the  French 
people  had  certainly  as  much  confidence  in  the  se- 
cure possession  of  Government  lands  as  any  people 
can  ever  have  in  large  issues  of  Government  bonds ; 
indeed,  it  is  certain  that  they  had  far  more  confi- 
dence in  their  lands  as  a  security  than  any  modern 
nation  can  have  in  large  issues  of  convertible  bonds 
obtained  by  payments  of  irredeemable  paper.  The 
simple  fact,  as  stated  by  John  Stuart  Mill,  which 
made  assignats  convertible  into  real  estate  unsuc- 
cessful was  thai/^the  vast  majority  of  people  could/ 
not  afford  to  mate  investments  outside  their  busi- 
ness ;^and  this  fact  is  just  as  fatal  to  any  attempt 
to  contract  large  issues  of  irredeemable  paper  by 
making  such  issues  convertible  into  bonds  bear- 
ing low  interest — save,  perhaps,  a  bold,  statesman- 
like attempt,  which  seizes  the  best  time  and  presses 
every  advantage,  eschewing  all  "interconvertibility  " 
devices,  and  sacrificing  everything  to  regain  a  sound 
currency  based  on  standards  common  to  the  entire 
financial  world. 

On  April  11, 1793,  a  law  was  passed  to  meet  the 


58  FIAT   MONEY   IN  FRANCE. 

case  of  those  who  bought  specie  with  paper.  Noth- 
ing could  be  more  natural  than  such  purchases. 
Husbands  who  wished  to  make  provision  for  their 
wives,  fathers  who  wished  to  make  provision  for 
their  children,  desired  to  accumulate  something  of 
acknowledged  value,  and  enormous  prices  in  paper 
were  paid  for  gold.  The  new  law  forbade  the  sale 
or  exchange  of  specie  for  more  than  its  nominal 
value  in  paper,  with  a  penalty  of  six  years'  impris- 
onment in  irons.* 

It  will  doubtless  astonish  many  to  learn  that,  in 
spite  of  these  evident  results  of  too  much  currency, 
the  old  cry  of  a  "  scarcity  of  circulating  medium  " 
was  not  stilled;  it  appeared  not  long  after  each 
issue,  no  matter  how  large,  and  reappeared  now. 

But  every  thoughtful  student  of  financial  history 
knows  that  this  cry  always  comes  after  such  issues — 
nay,  that  it  jRust  come — ^because  in  obedience  to  a 
natural  law  there  is  a  scarcity,  or  rather  insuffi- 
ciency^ of  currency  just  as  soon  as  prices  become 
adjusted  to  the  new  volume,  and  there  comes  some 
little  revival  of  business  with  the  usual  increase  of 
credit. 

The  cry  of  "  insufficient  amount  of  circulating 


*  See  Von  Sybel,  vol.  iii,  p.  26 ;  also  Montgaillard,  Histoire 
de  la  Revolution  Franyaise,  p.  196. 


FIAT  MONEY  IN  FRANCE.  59 

medium  ''  was  again  raised.  The  needs  of  the  Gov- 
ernment were  pressing,  and  within  a  month  after 
the  passage  of  the  fearful  penal  laws  made  necessary 
by  the  old  issues,  twelve  hundred  millions  more 
were  sent  forth."^ 

About  ten  days  after  this  a  law  was  passed  mak- 
ing a  forced  loan  of  one  thousand  millions  from  the 
rich.f  In  August,  1793,  appears  a  report  by  Cam- 
bon.  No  one  can  read  it  without  being  struck  by 
its  perverted  ability. 

But  while  Cambon's  plan  of  dealing  with  the 
public  debt  has  outlasted  all  revolutions  since,  his 
plan  of  dealing  with  the  inflated  currency  came  to 
speedy  and  wretched  failure. 

Yery  carefully  he  had  devised  a  funding  scheme 
which,  taken  in  connection  with  his  system  of  issues, 
was  in  eflfect  what  in  these  days  would  be  called  an 
^' interconvertihility  schemed  By  various  degrees 
of  persuasion  or  force  holders  of  assignats  were 
urged  to  convert  them  into  evidences  of  national 
debt,  bearing  interest  at  five  per  cent,:]:  with  the 
understanding  that  if  more  paper  were  afterward 

*  For  an  excellent  statement  of  the  action  of  this  law  in  our 
own  country,  see  Sumner,  p.  220. 

t  For  a  specimen  of  a  Forced  Loan  Certificate,  see  A.  D.  W. 
Collection. 

X  See  Cambon's  Report,  August  15,  1753,  pp.  49-60 ;  also 
Decree  of  August  15-24, 1793,  §  31,  chapters  xcvi-ciii. 
5 


60  FIAT  MONEY  IN  FRANCE. 

needed  more  would  be  issued.  All  in  vain.  The 
official  tables  of  depreciation  show  that  the  assignats 
continued  to  fall ;  soon  a  forced  loan  calling  in  a 
billion  of  these  checked  this  fall,  but  only  for  a  mo- 
ment.* The  "  interconvertibility  scheme  "  between 
currency  and  bonds  failed  as  dismally  as  the  "  inter- 
convertibility  scheme  "  between  currency  and  land 
had  failed. 

Soon  after  came  a  law  confiscating  the  property 
of  all  Frenchmen  who  left  France  before  July  14, 
1789,  and  who  had  not  returned.  This  gave  new 
land  to  be  mortgaged  for  the  security  of  paper 
money. 

Month  after  month,  year  after  year,  new  issues 
went  on.  Meanwhile  everything  possible  was  done 
to  keep  up  the  value  of  paper.  In  obedience  to 
those  who  believed  with  the  market  women  of  Paris, 
as  stated  in  their  famous  petition,  that  "  laws  should 
be  passed  making  paper  as  good  as  gold,"  Couthon, 
on  August  1,  1793,  proposed  and  carried  a  law  pun- 
ishing any  person  who  should  sell  assignats  at  less 
than  their  nominal  value,  with  imprisonment  for 
twenty  years  in  chains.  Two  years  later  Couthon 
carried  a  law  making  investments  in  foreign  coun- 

*  See  Tableau  de  Depreciation  du  Papier  Monnaie  dans  le 
D^partement  de  la  Seine. 


FIAT  MONEY  IN  FRANCE.  61 

tries  by  Frenchmen  punishable  with  death ;  and  to 
make  this  series  of  measures  complete,  to  keep  up 
paper  at  all  hazards^  on  Angust  15,  1793,  the  na- 
tional debt  was  virtually  repudiated."^ 

But  to  the  surprise  of  the  great  majority  of  the 
people  in  France,  after  the  momentary  spasm  of 
fear  had  passed^the  value  of  the  assignats  was  found 
not  to  have  been  increased  by  these  measures ;  on 
the  contrary,  they  persisted  in  obeying  the  natural 
laws  of  finance,  and  as  new  issues  increased  their 
value  decreased  in  a  constant  ratio.  ]^or  did  the 
most  lavish  aid  of  Nature  avail  to  help  matters.  The 
paper  money  of  the  nation  seemed  to  possess  a  magic 
power  to  transmute  prosperity  into  adversity.  The 
year  17,94  was  exceptionally  fruitful;  crops  were 
abundant ;  and  yet  with  the  autumn  came  scarcity 
of  provisions,  and  with  the  winter  came  famine. 
The  reason  is  perfectly  simple.  The  sequences  in 
that  whole  history  are  absolutely  logical.  First,  the 
Legislature  had  inflated  the  currency  and  raised 
prices  enormously.  Next,  it  had  been  forced  to 
establish  an  arbitrary  maximum  price  for  produce. 
But  this  price,  large  as  it  seemed,  was  not  equal  to 
the  real  value  of  produce;  many  of  the  farmers, 
therefore,  raised   less   produce   or  refrained   from 

^'-  See  Von  Sybel,  vol.  iii,  p.  172. 


62  FIAT  MONEY  IN  FRANCE. 

bringing  what  they  had  to  market."^  But,  as  is 
usual  in  such  cases,  the  trouble  was  ascribed  to 
everything  rather  than  the  real  cause,  and  the  most 
severe  measures  were  established  in  all  parts  of  the 
country  to  force  farmers  to  bring  produce  to  mar- 
ket, the  millers  to  grind  it,  and  the  shopkeepers  to 
sell  it.f  The  issues  of  paper  money  continued. 
Toward  the  end  of  1794  seven  thousand  million  as- 
signats  were  in  circulation.:]:  By  the  end  of  May, 
1795,  the  circulation  was  increased  to  ten  thousand 
millions ;  at  the  end  of  July,  to  fourteen  thousand 
millions ;  and  the  value  of  one  hundred  francs  in 
paper  fell  steadily,  first  to  four  francs  in  gold,  then 
to  three,  then  to  two  and  a  half.*  But  curiously 
enough,  when  this  depreciation  was  rapidly  going 
on,  as  at  various  other  periods  when  depreciation 
was  rapid,  there  came  an  apparent  revival  of  busi- 
ness. The  hopes  of  many  were  revived  by  the  fact 
that  in  spite  of  the  decline  of  paper  there  was  an 
exceedingly  brisk  trade  in  all  kinds  of  permanent 
property.     Whatever   articles  of  permanent  value 


*  See  Von  Sybel,  vol.  iii,  p.  173. 

f  See  Thiers ;  also,  for  curious  details  of  measures  taken  to 
compel  farmers  and  merchants,  see  Senior,  Lectures  on  Results 
Draper  Money,  pp.  86,  87. 
^X  See  Von  Sybel,  vol.  iv,  p.  231. 

*  Sje  Von  Sybel,  vol.  iv,  p.  330 ;  also  tables  of  depreciation 
in  Moniteur ;  also  official  reports  in  A.  D.  W.  Collection. 


FIAT   MONEY  IN  FRANCE.  ^3 

certain  people  were  willing  to  sell,  certain  other 
people  were  willing  to  buy  and  pay  largely  for  in 
assignats.  At  this,  hope  revived  for  a  time  in  cer- 
tain quarters.  But  ere  long  it  was  discovered  that 
this  was  one  of  the  most  terrible  results  of  a  natural 
law  which  is  sure  to  come  into  play  under  such  cir- 
cumstances. It  was  simply  a  feverish  activity  caused 
by  the  intense  desire  of  a  large  number  of  the 
shrewder  class  to  convert  their  paper  money  into 
anything  and  everything  which  they  could  hold  and 
hoard  until  the  collapse  which  they  foresaw  should 
take  place.  This  very  activity  in  business  was  sim- 
ply the  result  of  disease.  It  was  simply  legal  rob- 
bery of  the  more  enthusiastic  and  trusting  by  the 
more  cold-hearted  and  keen.  It  was  the  "  unload- 
ing "  of  the  assignats  by  the  cunning  upon  the  mass 
of  the  people.* 

But  even  this  could  not  stop  the  madness  of  in- 
flation. New  issues  continued,  until  at  the  begin- 
ning of  1796  over  forty-five  thousand  million  francs 
had  been  issued,  of  which  over  thirty-six  thousand 
millions  were  in  actual  circulation.f 

*  For  a  lifelike  sketch  of  the  vigorous  way  in  which  these 
exchanges  of  assignats  for  valuable  property  went  on  at  periods 
of  the  rapid  depreciation  of  paper,  see  Challamel,  Les  Franyais 
sous  la  Revolution,  p.  309 ;  also  Say,  :ficonomie  Politique,  sep- 
tieme  edition,  p.  147. 

f  See  De  Nervo,  Finances  Fran^aises,  p.  280. 


^i  FIAT  MONEY  IN  FRANCE. 

It  is  very  interesting  to  note,  in  the  midst  of  all 
this,  the  steady  action  of  another  simple  law  in 
finance.  The  Government,  with  its  prisons  and  its 
guillotines,  with  its  laws  inflicting  twenty  years'  im- 
prisonment in  chains  upon  the  buyers  of  gold,  and 
death  upon  investors  in  foreign  securities,  was 
utterly  powerless  against  this  law.  Tlie  louis  dJor 
stood  in  the  market  as  a  monitor,  noting  each  day, 
with  unerring  fidelity,  the  decline  in  value  of  the 
assignat ;  a  monitor  not  to  be  bribed,  not  to  be 
scared.  As  well  might  the  I^ational  Convention 
try  to  bribe,  or  scare  away,  the  polarity  of  the  mari- 
ner's compass.  On  August  1,  1Y95,  the  gold  louis 
of  25  francs  was  worth  920  francs ;  September  1st, 
1,200  francs ;  on  November  1st,  2,600  francs ;  on 
December  1st,  3,050  francs.  In  February,  1Y96,  it 
was  worth  in  market  7,200  francs,  or  one  franc  in 
gold  was  worth  288  francs  in  paper  money.  Prices 
of  all  commodities  went  up  in  proportion.* 

The  writings  of  the  period  give  curious  details 
of  these  prices.  Thibaudeau,  in  his  Memoirs,  speaks 
of  sugar  as  500  francs  a  pound,  soap  230  francs, 

*  For  a  very  complete  table  of  the  depreciation  from  day  to 
day,  see  Supplement  to  the  Moniteur,  of  October  2,  1797.  For 
the  market  prices  of  the  louis  d'or  at  the  first  of  each  month,  as 
the  collapse  approached,  see  Montgaillard.  See  also  official  lists 
in  the  A,  D.  W.  Collection. 


FIAT  MONEY  IK  FRANCE.  65 

candles  140  francs.*^  Mercier,  in  his  lifelike  pic- 
tures of  the  French  metropolis  at  that  period,  men- 
tions 600  francs  as  carriage  hire  for  a  single  drive, 
and  6,000  francs  for  an  entire  day.f  Everything 
was  inflated  in  about  the  same  proportion,  except 
the  wages  of  labor :  as  manufactories  closed,  wages 
had  fallen,  until  all  that  kept  them  up  at  all  was  the 
fact  that  so  many  laborers  were  drafted  off  into  the 
army.  From  this  state  of  things  came  grievous 
wrong  and  gross  fraud.  Men  who  had  foreseen 
these  results  fully,  and  had  gone  into  debt,  were  of 
course  jubilant.  He  who  in  1790  had  borrowed 
10,000  francs  could  pay  his  debts  in  1796  for  about 
35  francs.  Laws  were  made  to  meet  these  abuses. 
As  far  back  as  1794  a  plan  was  devised  for  publish- 
ing official  "  tables  of  depreciation  "  to  be  used  in 
making  equitable  settlements  of  debts,  but  all  such 
machinery:!:  proved  futile.  On  the  18th  of  May, 
1796,  a  young  man  complained  to  the  National  Con- 
vention that  his  elder  brother,  who  had  been  acting 
as  administrator  of  his  deceased  father's  estate,  had 
paid  the  heirs  in  assignats,  and  that  he  had  received 
scarcely  one-three-hundredth  part  of  the  real  value 

*  See  Memoires  de  Thibaudeau,  vol.  ii,  p.  26. 
f  See  Le  Nouveau  Paris,  vol.  ii,  p.  90. 
X  For  curious  examples  of  these  "  scales  of  depreciation /'  see 
the  A.  D.  W.  Collection. 


66  FIAT  MONEY  IN  FRANCE. 

of  his  sliare.*  To  meet  cases  like  this,  a  law  was 
passed  establishing  a  "  scale  of  proportion."  Taking 
as  a  standard  the  value  of  the  assignat  when  there 
were  two  billions  in  circulation,  this  law  declared 
that,  in  the  payment  of  debts,  one  quarter  should  be 
added  to  the  amount  originally  borrowed  for  every 
five  hundred  millions  added  to  the  circulation.  In 
obedience  to  this  law  a  man  who  borrowed  two  thou- 
sand francs  when  there  were  two  billions  in  circula- 
tion would  have  to  pay  his  creditors  twenty-five 
hundred  francs  when  half  a  billion  more  was  added 
to  the  currency,  and  over  thirty  thousand  francs  be- 
fore the  emissions  of  paper  reached  their  final 
amount.  This  brought  new  evils,  worse,  if  possible, 
than  the  old.f 

But,  widespread  as  these  evils  were,  they  were 
small  compared  with  the  universal  distress.  The 
question  will  naturally  be  asked,  On  whom  did  this 
vast  depreciation  mainly  fall  ^  at  last?  When  this 
currency  had  sunk  to  about  one-three-hundredth 
part  of  its  nominal  value,  and,  after  that,  to  nothing, 
in  whose  hands  was  the  bulk  of  it  ?  The  answer  is 
simple.  I  will  give  it  in  the  exact  words  of  that 
thoughtful   historian   from   whom   I   have   already 

*  For  a  striking  similar  case  in  our  own  country,  see  Sumner, 
History  of  American  Currency,  p.  47. 

f  See  Villeneuve  Bargemont,  Histoire  de  I'^conomie  Politique, 
vol.  ii,  p.  229. 


FIAT  MONEY  IN  FRANCE.  67 

quoted  :  "  Before  the  end  of  the  year  1795  the 
paper  money  was  almost  exclusively  in  the  hands  of 
the  working  classes,  employees,  and  men  of  small 
means,  whose  property  was  not  large  enough  to  in- 
vest in  stores  of  goods  or  national  lands."^  The 
financiers  and  men  of  large  means,  though  they 
suflEered  terribly,  were  shrewd  enough  to  put  much 
of  their  property  into  objects  of  permanent  value. 
The  working  classes  had  no  such  foresight,  or  skill, 
or  means.  On  them  finally  came  the  great  crushing 
weight  of  the  loss.  After  the  first  collapse  came  up 
the  cries  of  the  starving.  Eoads  and  bridges  were 
neglected  ;  manufactures  were  generally  given  up  in 
utter  helplessness."  To  continue,  in  the  words  of  the 
historian  already  cited  :  "  None  felt  any  confidence 
in  the  future  in  any  respect ;  none  dared  to  make  an 
investment  for  any  length  of  time,  and  it  was  ac- 
counted a  folly  to  curtail  the  pleasures  of  the  moment, 
to  accumulate  or  save  for  an  uncertain  future."  f 

While  this  system  was  thus  running  on,  a  new 
Government  had  been  established.  In  October, 
1795,  came  into  power  the  "  Directory."     It  found 

*  See  Von  Sybel,  vol.  iv,  pp.  337,  338.  See,  also,  for  con- 
firmation, Challamel,  Histoire  Musee,  vol.  ii,  p.  179.  For  a 
thoughtful  statement  of  the  reasons  why  such  paper  was  not  in- 
vested in  lands  by  men  of  moderate  means,  and  workingmen, 
see  Mill,  Political  Economy,  vol.  ii,  pp.  81,  82. 

f  See  Von  Sybel,  vol.  iv,  p.  223. 


68  FIAT  MONEY  IN  FRANCE. 

the  country  utterly  impoverished,  and  its  only  re- 
source at  first  was  to  print  more  paper  money,  and 
to  issue  it  even  while  wet  from  the  press. 

The  next  attempt  of  the  Directory  was  to  secure 
a  forced  loan  of  six  hundred  million  francs  from 
the  wealthier  classes ;  but  this  was  found  fruitless. 
Next  a  national  bank  was  proposed ;  but  capitalists 
were  loath  to  embark  in  banking,  while  the  howls  of 
the  mob  against  all  who  had  anything  especially  to 
do  with  money  resounded  in  every  city.  At  last 
the  Directory  bethought  themselves  of  another  ex- 
pedient. It  was  by  no  means  new.  It  was  fully 
tried  on  our  own  continent  twice  before  that  time, 
and  once  since — first,  in  our  colonial  period ;  next, 
during  our  Confederation ;  last,  by  the  recent 
"  Southern  Confederacy  " — and  here,  as  elsewhere, 
always  in  vain.  But  experience  yielded  to  theory — 
plain  business  sense  to  financial  metaphysics.  It 
was  determined  to  issue  a  new  paper  which  should 
be  "  fully  secured  "  and  "  as  good  as  gold." 

On  February  19,  1796,  the  copper  plates  of  the 
assignats  were  broken  up,  and  it  was  decreed  that 
no  more  assignats  be  issued  ;  instead  of  them,  it 
was  decreed  that  a  new  paper  money,  "fully  se- 
cured, and  as  good  as  gold,"  be  issued,  under  the 
name  of  i'  mandatsP  In  order  that  these  notes 
should  be  "  fully  secured,"  choice  public  real  estate 


FIAT  MONEY  IN  FRANCE.  69 

was  set  apart  to  an  amount  fully  equal  to  the  nomi- 
nal value  of  the  issue,  and  any  one  possessing  any 
quantity  of  the  mandats  could  at  once  take  posses- 
sion of  Government  lands  to  their  full  face  value; 
the  price  of  the  lands  to  be  determined  according 
to  their  actual  rental,  and  without  the  formalities 
and  delays  previously  established  in  regard  to  the 
purchase  of  lands  with  assignats.  In  order  to  make 
the  mandats  "  as  good  as  gold,"  it  was  planned  by 
forced  loans  and  other  means  to  reduce  the  quan- 
tity of  assignats  in  circulation  so  that  the  value  of 
each  assignat  should  be  raised  to  one  thirtieth  of  the 
value  of  gold,  then  to  make  mandats  legal  tender, 
and  to  substitute  them  for  assignats  at  the  rate  of 
one  for  thirty."^  I^ever  were  great  expectations 
more  cruelly  disappointed.  Even  before  they  could 
be  issued  from  the  press,  the  mandats  fell  to  thirty 
per  cent  of  their  nominal  value ;  from  this  they 
speedily  fell  to  fifteen  per  cent,  and  soon  after  to 
five  per  cent.  This  plan  failed — just  as  it  failed  in 
New  England  in  1Y37 ;  just  as  it  failed  under  our 
own  Confederation  in  1781 ;  just  as  it  failed  under 
the  ''  Southern  Confederacy."  f 


*  For  details  of  this  plan  very  thoroughly  given,  see  Thiers's 
History  of  the  French  Revolution,  Bentley's  edition,  vol.  iv,  pp. 
410-412. 

f  For  an  account  of  "  new  tenor  bills  "  and  their  failure  in 


70  FIAT   MONEY  IN  FRANCE. 

To  sustain  this  new  currency  the  Government 
resorted  to  every  method  that  ingenuity  could  de- 
vise. Pamphlets  were  published  explaining  their 
advantages  to  people  of  every  capacity.  Never  was 
there  more  skillful  puffing  of  a  financial  scheme.  A 
pamphlet,  signed  "Marchant,"  and  dedicated  to 
"  People  of  Good  Faith,"  was  widely  circulated.  In 
this  Marchant  took  pains  to  show  the  great  advan- 
tage of  the  mandats  as  compared  with  the  assi- 
gnats :  how  land  could  be  more  easily  acquired  with 
them  than  with  assignats ;  how  their  security  was 
better ;  how  they  could  not  by  any  possibility  sink 
in  value  as  the  assignats  had  done.  Even  before  the 
pamphlet  was  dry  from  the  press,  the  depreciation 
of  mandats  had  refuted  his  entire  argument.^  Then, 
too,  we  have  at  work  again  the  old  superstition  that 
there  is  some  way  of  keeping  up  the  value  of  paper 
money  other  than  by  having  gold  ready  to  redeem 
as  much  of  it  as  may  be  presented.  The  old  plan  of 
penal  measures  is  again  pressed.  Monot  leads  off 
by  proposing  penalties  against  those  who  shall  sj[)eah 
publicly  against  the  mandats,  Talot  thinks  the  penal- 
ties ought  to  be  made  especially  severe  ;  and  finally 

1737,  see  Sumner,  pp.  27-31 ;  for  their  failure  in  1781,  see  Morse, 
Life  of  Alexander  Hamilton,  vol.  i,  pp.  86,  87.  For  similar 
failure  in  Austria,  see  Sumner,  p.  314. 

*  See  Marchant,  Lettre  aux  Gens  de  Bonne  Foi. 


FIAT  MONEY  IN  FRANCE.  71 

it  is  enacted  that  any  persons  "  who  by  their  dis- 
course or  writing  shall  decry  the  mcmdats  shall  be 
condemned  to  a  fine  of  not  less  than  one  thousand 
livres,  or  more  than  ten  thousand ;  and  in  case  of  a 
repetition  of  the  offense,  to  four  years  in  irons."  It 
was  also  decreed  that  those  who  refuse  to  receive 
the  mandats  be  fined  the  first  time  the  exact  sum 
which  they  refuse ;  the  second  time,  ten  times  as 
much;  and  the  third  time,  be  punished  with  two 
years  in  prison.  But  here,  too,  came  in  the  action 
of  those  natural  laws  which  are  alike  inexorable  in 
all  countries.  This  attempt  proved  futile  in  France, 
just  as  it  had  proved  futile,  less  than  twenty  years 
before,  in  America."^  No  enactments  could  stop 
the  downward  tendency  of  this  new  paper,  "  fully 
secured,"  "  as  good  as  gold  "  :  the  laws  that  finally 
govern  finance  are  not  made  in  conventions  or  con- 
gresses. 

On  July  16,  1796,  the  great  blow  was  struck.  It 
was  decreed  that  all  paper,  mandats  and  assignats, 
should  be  taken  at  its  real  value,  and  that  bargains 
might  be  made  in  whatever  cuiTency  the  people 
chose.  The  real  value  of  the  mandats  at  this  time 
had  sunk  to  about  five  per  cent  of  their  nominal 
value,  f 

*  See  Sumner,  p.  44. 

t  See  De  Nervo,  Finances  Frangaises.  p.  288. 


72  FIAT  MONEY  IN  FRANCE. 

The  reign  of  paper  money  in  France  was  over. 
The  twenty-five  hundred  million  mandats  went  into 
the  common  heap  of  refuse  with  the  previous  thirty- 
six  billion  assignats.  The  whole  vast  issue  was  re- 
pudiated. 

The  collapse  had  come  at  last ;  the  whole  nation 
was  plunged  into  financial  distress  and  debauchery 
from  one  end  to  the  other. 

To  this  general  distress  there  was,  indeed,  one 
exception.  In  Paris  and  in  a  few  of  the  greater 
cities,  men,  like  Tallien,  of  the  heartless,  debauched, 
luxurious,  speculator,  contractor,  and  stock-gambler 
classes,  had  risen  above  the  ruins  of  the  multitudes 
of  smaller  fortunes.  Tallien,  one  of  the  worst  of 
the  demagogue  "  reformers,"  and  a  certain  number 
of  men  like  him,  had  been  skillful  enough  to  be- 
come millionaires,  while  their  dupes,  who  had  clam- 
ored for  issues  of  irredeemable  paper  money,  had 
become  paupers. 

The  luxury  and  extravagance  of  these  men  and 
their  families  form  one  of  the  most  significant  fea- 
tures in  any  picture  of  the  social  condition  of  that 
period.^ 

*  Among  the  many  striking  accounts  of  the  debasing  effects 
of  "  inflation "  upon  France  under  the  Directory,  perhaps  the 
best  is  that  of  Lacretelle,  vol.  xiii,  pp.  32-36.  For  similar  effect, 
produced  by  same  cause  in  our  own  country  in  1819,  see  state- 
ment from  NDes's  Register  in  Sumner,  p.  80. 


FIAT  MONEY  IN  FRANCE.  73 

A  few  years  before  this  the  leading  women  in 
French  society  showed  a  nobleness  of  character  and 
a  simplicity  in  dress  worthy  of  Roman  matrons. 
Of  these  were  Madame  Roland  and  Madame  Des- 
moulins ;  but  now  all  was  changed.  At  the  head  of 
society  stood  Madame  Tallien,  and  others  like  her, 
wild  in  extravagance,  seeking,  daily,  new  refine- 
ments in  luxury,  and  demanding  of  their  husbands 
and  lovers  vast  sums  to  array  them  and  feed  their 
whims.  If  such  sums  could  not  be  obtained  hon- 
estly, they  must  be  obtained  dishonestly.  The  more 
closely  one  examines  that  period,  the  more  clearly 
it  is  seen  that  the  pictures  given  by  Thibaudeau  and 
Challamel  and  De  Goncourt  are  not  at  all  exag- 
gerated.^ 

But  when  all  was  over  with  paper  money,  specie 
began  to  reappear — at  first  in  sufiicient  sums  to  do 
the  small  amount  of  business  which  remained  after 
the  collapse.  Then,  as  the  business  demand  in- 
creased, the  amount  of  specie  flowed  in  from  the 
world  at  large  to  meet  it,  and  the  nation  gradually 
recovered  from  that  long  paper-money  debauch. 

Thibaudeau,  a  very  thoughtful  observer,  tells  us 
in  his  Memoirs  that  great  fears  were  felt  as  to  a 

*  For  Madame  Tallien  and  luxury  of  the  stock-gambler 
classes,  see  Challamel,  Les  Frangais  sous  la  Revolution,  pp.  30, 
33 ;  also  De  Goncourt,  Les  Frangais  sous  le  Directoire. 


74  FIAT  MONEY  IX  FRANCE. 

want  of  circulating  medium  between  the  time  when 
paper  should  go  out  and  coin  should  come  in ;  but 
that  no  such  want  was  ever  felt — that  coin  came  in 
as  if  by  magic — that  the  nation  rapidly  recovered 
from  its  paper-money  debauch,  and  within  a  year 
business  entered  a  new  current  of  prosperity.^ 

Nothing  could  better  exemplify  the  saying  of 
one  of  the  most  shrewd  of  modern  statesmen,  that 
"  there  will  always  be  money."  f 

Such,  briefly  sketched  in  its  leading  features,  is 
the  history  of  the  most  skillful,  vigorous,  and  per- 
sistent attempt  ever  made  to  substitute  for  natural 
laws  in  finance  the  ability  of  a  legislative  body,  and 
to  substitute  for  a  standard  of  value,  recognized 
throughout  the  world,  a  national  standard  devised 
by  theorists  and  manipulated  by  schemers.  Every 
other  attempt  of  the  same  kind  in  human  history, 
under  whatever  circumstances,  has  reached  similar 
results  in  kind  if  not  in  degree ;  all  of  them  show 
the  existence  in  the  world  of  financial  laws  as  sure 
in  their  operation  as  those  laws  which  hold  the 
planets  in  their  courses.:]: 

*  For  similar  expectation  of  a  "  shock,"  which  did  not  occur, 
at  the  resumption  of  specie  payments  in  Massachusetts,  see 
Sumner,  History  of  American  Currency,  p.  34. 

t  See  Thiers. 

X  For  exemples  of  similar  effects  in  Russia,  Austria,  and 
Denmark,  see  Storch,  ifeconomie  Politique,  a^oI.  iv ;  for  similar 


FIAT  MONEY  IN  FRANCE.  75 

I  have  now  presented  this  history  in  its  chrono- 
logical order — the  order  of  events :  let  me,  in  con- 
clusion, s-um  it  up  in  its  logical  order — the  order  of 
causes  and  effects. 

And,  first,  in  the  economic  development.  From 
the  first  careful  issues  of  paper  money,  irredeema- 
ble but  moderate,  we  saw,  as  an  immediate  result, 
apparent  improvement  and  activity  in  business. 
Then  arose  the  clamor  for  more  paper  money.  At 
first,  new  issues  were  made  with  great  diflSculty ; 
but,  the  dike  once  broken,  the  current  of  irredeema- 
ble currency  poured  through ;  and,  the  breach  thus 
enlarging,  this  currency  was  soon  swollen  beyond 
control.  It  was  urged  on  by  speculators  for  a  rise 
in  values  ;  by  a  thoughtless  mob,  who  thought  that 
a  nation,  by  its  simple  fiat,  could  stamp  real  value 
upon  a  valueless  object :  as  a  consequence,  a  great 
debtor  class  grew  rapidly  and  naturally,  and  this 
class  gave  its  influence  to  depreciate  more  and  more 
the  currency  in  which  its  debts  were  to  be  paid.* 

effects  in  the  United  States,  see  Gouge,  Paper  Money  and  Bank- 
ers in  the  United  States ;  also  Sumner,  History  of  American 
Currency.  For  working  out  of  the  same  principles  in  England, 
depicted  in  a  masterly  way,  see  Macaulay,  History  of  England, 
chap,  xxi ;  and  for  curious  exhibition  of  same  causes  producing 
same  results  in  ancient  Greeoe,  see  a  curious  quotation  by  Ma- 
caulay in  same  chapter. 

*  For  parallel  cases  in  early  history  of  our  own  country,  see 
Sumner,  p.  21,  and  elsewhere. 
6 


76  FIAT  MONEY  IN  FRANCE. 

All  the  energy  of  the  Government  was  devoted  to 
grinding  out  still  more  paper  ;  commerce  was  at 
first  stimulated  by  the  difference  in  exchange ;  but 
this  cause  soon  ceased  to  operate,  and  commerce, 
having  been  stimulated  unhealthf  ully,  wasted  away. 

Manufactures  at  first  received  a  great  impulse ; 
but,  ere  long,  this  overproduction  and  overstimulus 
proved  as  fatal  to  them  as  to  commerce.  From 
time  to  time  there  was  a  revival  of  hope  by  an  ap- 
parent revival  of  business  ;  but  this  revival  of  busi- 
ness was  at  last  seen  to  be  simply  caused  by  the  de- 
sire of  the  more  far-seeing  and  cunning  to  exchange 
paper  money  for  objects  of  permanent  value.  As  to 
the  people  at  large,  the  classes  living  on  fixed  in- 
comes or  salaries  felt  the  pressure  first,  as  soon  as 
the  purchasing  power  of  their  fixed  incomes  was  re- 
duced. Soon  the  great  class  living  on  wages  felt  it 
even  more  sadly. 

Prices  of  the  necessities  of  life  increased  ;  mer- 
chants were  obliged  to  increase  them,  not  only  to 
cover  depreciation  of  their  merchandise,  but  also  to 
cover  their  risk  of  loss  from  fiuctuation ;  while  the 
prices  of  products  thus  rose,  wages,  which  had  gone 
up  at  first  under  the  general  stimulus,  fell.  Under 
the  universal  doubt  and  discouragement,  commerce 
and  manufactures  were  checked  or  destroyed.  As 
a  consequence,  the  demand  for  labor  was  stopped ; 


FIAT  MONEY  IN  FRANCE.  Y7 

laboring  men  were  thrown  out  of  employment,  and, 
under  the  operation  of  the  simplest  law  of  supply 
and  demand,  the  price  of  labor — the  daily  wages  of 
the  laboring  class — went  down  until,  at  a  time  when 
prices  of  food,  clothing,  and  various  articles  of  con- 
sumption were  enormous,  wages  were  nearly  as  low 
as  at  the  time  preceding  the  first  issue  of  irredeema- 
ble currency. 

The  mercantile  classes  at  first  thought  them- 
selves exempt  from  the  general  misfortune.  They 
were  delighted  at  the  apparent  advance  in  the  value 
of  the  goods  on  their  shelves.  But  they  soon  found 
that,  as  they  increased  prices  to  cover  the  inflation 
of  currency  and  the  risk  from  fluctuation  and  unr- 
certainty,  purchasers  were  fewer,  purchases  less, 
and  payments  less  sure ;  a  feeling  of  insecurity 
spread  throughout  the  country;  enterprise  was 
deadened  and  general  stagnation  followed. 

'New  issues  of  paper  were  clamored  for  as  a  new 
dram  is  called  for  by  a  drunkard.  The  new  issues 
only  increased  the  evil ;  capitalists  were  all  the 
more  reluctant  to  embark  their  money  on  such  a 
sea  of  doubt.  Workmen  of  all  sorts  were  more 
and  more  thrown  out  of  employment.  Issue  after 
issue  of  currency  came  ;  but  no  relief  save  a  mo- 
mentary stimulus,  which  aggravated  the  disease. 
The  most   ingenious   evasions   of   natural   laws  in 


78  FIAT  MONEY  IN   FRANCE. 

finance  which  the  most  subtle  theorists  could  con- 
trive were  tried — all  in  vain  ;  the  most  brilliant  sub- 
stitutes for  those  laws  were  tried ;  self-regulating 
schemes,  "  intercon verting  "  schemes — all  equally 
vain."^  All  thoughtful  men  had  lost  confidence. 
All  men  were  waiting  /  stagnation  became  worse 
and  worse.  At  last  came  the  collapse,  and  then  a 
return  by  a  fearful  shock  to  a  state  of  things 
which  presented  something  like  certainty  of  remu- 
neration to  capital  and  labor.  Then,  and  not  until 
then,  came  the  beginning  of  a  new  era  of  pros- 
perity. 

Just  as  dependent  on  the  law  of  cause  and  effect 
was  the  moral  development.  Out  of  the  inflation 
of  prices  grew  a  speculating  class ;  and,  in  the  com- 
plete uncertainty  as  to  the  future,  all  business  be- 
came a  game  of  chance,  and  all  business  men  unin- 
tentional gamblers.  In  city  centers  came  a  quick 
growth  of  stockjobbers  and  speculators ;  and  these 
set  a  debasing  fashion  in  business  which  spread  to 
the  remotest  parts  of  the  country.  Instead  of  satis- 
faction with  legitimate  gains  came  admiration  for 
cheatery.  Then,  too,  as  values  became  more  and 
more  uncertain,  there  was  no  longer  any  motive  for 

*  For  a  review  of  some  of  these  attempts,  with  eloquent 
statement  of  their  evil  results,  see  Memoires  de  Durand  de 
Maillane,  pp.  166-169. 


FIAT  MONEY  IN  FRANCE.  79 

care  or  economy,  but  every  motive  for  immediate 
expenditure  and  present  enjoyment.  So  came  upon 
the  nation  the  obliteration  of  the  idea  of  thrift. 
In  this  mania  for  yielding  to  present  enjoyment 
rather  than  providing  for  future-  comfort  were  the 
seeds  of  new  growths  of  wretchedness ;  and  luxury, 
senseless  and  extravagant,  set  in :  this,  too,  spread 
as  a  fashion.  To  feed  it,  there  came  cheatery  in 
the  nation  at  large,  and  corruption  among  officials 
and  persons  holding  trusts  :  while  the  men  set  such 
fashions  in  business,  private  and  official,  women  like 
Madame  Tallien  set  fashions  of  extravagance  in 
dress  and  living  that  added  to  the  incentives  to 
corruption.  Faith  in  moral  considerations,  or  even 
in  good  impulses,  yielded  to  general  distrust.  Na- 
tional honor  was  thought  a  fiction  cherished  only 
by  enthusiasts.  Patriotism  was  eaten  out  by  cyni- 
cism. 

Thus  was  the  history  of  France  logically  devel- 
oped in  obedience  to  natural  laws;  such  has,  to  a 
greater  or  less  degree,  always  been  the  result  of 
irredeemable  paper  issues,  created  according  to  the 
whim  or  interest  of  legislative  assemblies  rather 
than  based  upon  standards  of  value  permanent  in 
their  nature  and  agreed  upon  throughout  the  en- 
tire commercial  wojld ;  such,  we  may  fairly  expect, 
will  be  always  the  result  of  them  until  t^ifiat 


80  FIAT  MONEY  IN  FRANCE. 

of  the  Almighty  shall  evolve  laws  in  the  universe 
radically  different  from  those  which  at  present  ob- 
tain.^ 

And,  finally,  as  to  the  general  development  of 
the  theory  and  practice  which  all  this  history  re- 
cords. 

My  subject  has  been  Fiat  Money  in  France ; 
How  it  came ;  What  it  brought ;  and  How  it 
ended. 

It  came  by  seeking  a  remedy  for  a  compara* 
tively  small  evil,  in  an  evil  infinitely  more  danger- 
ous. To  cure  a  disease  temporary  in  its  character 
a  corrosive  poison  was  administered  which  ate  out 
the  vitals  of  French  prosperity. 

It  progressed  according  to  a  law  in  social  phys- 
ics which  we  may  call  the  law  of  accelerating 
issue  and  depreciation.  It  was  comparatively  easy 
to  refrain  from  the  first  issue;  it  was  exceeding- 
ly difficult  to  refrain  from  the  second  ;  to  re- 
frain from  the  third  and  those  following  was  impos- 
sible. 

It  brought,  as  you  have  seen,  to  commerce  and 
manufactures,  the  mercantile  interest,  the  agricul- 

*  For  similar  effect  of  an  inflated  currency  in  enervating 
and  undermining  trade,  husbandry,  manufactures,  and  morals, 
in  our  own  country,  in  1779,  see  Daniel  Webster,  cited  in  Sumner, 
pp.  45-50.  For  similar  effects  in  other  countries,  see  Senior, 
Storch,  Macaulay,  and  others,  already  cited. 


PIAT  MONEY  IN  FRANCE.  gj 

tural  interest,  utter  ruin.  It  brought  on  these  thei 
same  destruction  which  would  come  to  a  Hollander 
opening  the  dikes  of  the  sea  to  irrigate  his  land  in  a 
dry  summer. 

It  ended  in  the  complete  financial,  moral,  and 
political  prostration  of  France — a  prostration  from 
which  a  great  absolute  monarch  alone  was  able  to 
draw  it. 

But  this  history  would  be  incomplete  without  a 
brief  sequel  showing  how  that  monarch  profited  by 
this  frightful  experience.  When  Bonaparte  took 
the  consulship  the  condition  of  fiscal  affairs  was 
appalling.  The  Government  was  bankrupt ;  an 
immense  debt  was  unpaid.  The  further  collection 
of  taxes  seemed  impossible ;  the  assessments  were 
in  hopeless  confusion.  War  was  going  on  in  the 
East,  on  the  Rhine,  and  in  Italy,  and  civil  war  in 
La  Vendee.  All  the  armies  had  been  long  unpaid, 
and  the  largest  loan  that  could  for  a  moment  be 
effected  was  for  a  sum  hardly  meeting  the  expenses 
of  the  Government  for  a  single  day.  At  the  first 
cabinet  council  Bonaparte  was  asked  what  he  in- 
tended to  do.  He  replied,  "  I  will  pay  cash  or 
pay  nothing."  From  this  time  he  conducted  all 
his  operations  on  this  basis.  He  arranged  the 
assessments,  funded  the  debt,  and  made  everj  pay- 
ment in  cash ;  and  from  this  time — during  all  the 


82  FIAT  MONEY  IN  FRANCE. 

campaigns  of  Marengo,  Austerlitz,  Jena,  Eylau, 
Friedland,  down  to  the  Peace  of  Tilsit  in  1807 — 
there  was  but  one  suspension  of  specie  payment, 
and  this  only  for  a  few  days.  When  the  first 
great  European  coalition  was  formed  against  the 
empire,  Napoleon  was  hard  pressed  financially, 
and  it  was  proposed  to  resort  to  paper  money ; 
but  he  wrote  to  his  minister,  "  While  I  live  I  will 
never  resort  to  irredeemable  paper."  He  never 
did,  and  France  under  this  determination  com- 
manded all  the  gold  she  needed.  When  Waterloo 
came,  with  the  invasion  of  the  allies,  with  war 
on  her  own  soil,  with  a  change  of  dynasty,  and- 
heavy  expenses  for  war  and  indemnities,  France, 
on  a  specie  basis,  experienced  no  severe  financial 
distress. 

If  we  glance  at  the  financial  history  of  France 
during  the  Franco-Prussian  War  and  the  Com- 
munist struggle,  in  which  a  far  more  terrible  pres- 
sure was  brought  upon  French  finance  than  our 
own  recent  civil  war  put  upon  American  finance, 
and  yet  with  no  national  stagnation  or  distress,  but 
with  a  steady  progress  in  prosperity,  we  shall  see 
still  more  clearly  the  advantage  of  meeting  a  finan- 
cial crisis  in  an  honest  and  manly  way,  and  by 
methods  sanctioned  by  the  world's  most  costly  ex- 
perience, rather  than  by  yielding  to  the  schemes  of 


FIAT  MONEY  IN  FRANCE.  83 

speculators,  or  to  the  dreams  of  theorists,  or  to 
financial  metaphysics.^ 

There  is  a  lesson  in  all  this  which  it  behooves 
every  thinking  man  to  ponder. 

*  For  facts  regarding  French  finance  under  the  emperor,  I 
am  indebted  to  Hon.  David  A.  Wells.  For  more  recent  tri- 
umphs of  financial  common  sense  in  France,  see  Bonnet's  arti- 
cles, translated  by  the  late  George  Walker,  Esq. 


EFFECTS  OF  CHEAP  COINAGE. 

From  Macaulay^s  History  of  England. 

Who  suffer  the  most  from  the  Debasement  of 
the  Currency  ? — The  misgovernment  of  Charles  and 
James,  gross  as  it  had  been,  had  not  prevented  the 
common  business  of  life  from  going  steadily  and 
prosperously  on.  While  the  honor  and  independ- 
ence of  the  state  were  sold  to  a  foreign  power, 
while  chartered  rights  were  invaded,  while  funda- 
mental laws  were  violated,  hundreds  of  thousands 
of  quiet,  honest,  and  industrious  families  labored 
and  traded,  ate  their  meals,  and  lay  down  to  rest 
in  comfort  and  security.  Whether  Whigs  or 
Tories,  Protestants  or  Jesuits  were  uppermost,  the 
grazier  drove  his  beasts  to  market;  the  grocer 
weighed  out  his  currants  ;  the  draper  measured  out 
his  broadcloth  ;  the  hum  of  buyers  and  sellers  was 
as  loud  as  ever  in  the  town ;    the   harvest  home 

was  celebrated  as  joyously  as  ever  in  the  hamlets ; 

84 


FIAT  MONEY  IN  FRANCE.  85 

the  cream  overflowed  the  pails  of  Cheshire;  the 
apple  juice  foamed  in  the  presses  of  Herefordshire ; 
the  piles  of  crockery  glowed  in  the  furnaces  of  the 
Trent,  and  the  barrows  of  coal  rolled  fast  along  the 
timber  railways  of  the  Tyne. 

But  when  the  great  instrument  of  exchange  be- 
came thoroughly  deranged,  all  trade,  all  industry, 
were  smitten  as  with  a  palsy.  The  evil  was  felt 
daily  and  hourly  in  almost  every  place  and  by 
almost  every  class — in  the  dairy  and  on  the  thrashing 
floor,  by  the  anvil  and  by  the  loom,  on  the  billows 
of  the  ocean  and  in  the  depths  of  the  mine.  Noth- 
ing could  be  purchased  without  a  dispute.  Over 
every  counter  there  was  wrangling  from  morning 
to  night.  The  workman  and  his  employer  had  a 
quarrel  as  regularly  as  the  Saturday  came  round. 
On  a  fair  day  or  a  market  day  the  clamors,  the  re- 
proaches, the  taunts,  the  curses,  were  incessant ;  and 
it  was  well  if  no  booth  was  overturned  and  no  head 
broken. 

No  merchant  would  contract  to  deliver  goods 
without  making  some  stipulation  about  the  quality 
of  the  coin  in  which  he  was  to  be  paid.  Even  men 
of  business  were  often  bewildered  by  the  confusion 
into  which  all  pecuniary  transactions  were  thrown. 
The  simple  and  the  careless  were  pillaged  without 
mercy  by  extortioners,  whose  demands  grew  even 


86  FIAT  MONEY  IN  FRANCE. 

more  rapidly  than  the  money  shrank.  The  price  of 
the  necessaries  of  life,  of  shoes,  of  ale,  of  oatmeal, 
rose  fast.  The  laborer  found  that  the  bit  of  metal 
which,  when  he  received  it,  was  called  a  shilling 
w^ould  hardly,  when  he  wanted  to  purchase  a  pot  of 
beer  or  a  loaf  of  rye  bread,  go  as  far  as  sixpence. 
Where  artisans  of  more  than  usual  intelligence  were 
collected  in  great  numbers,  as  in  the  dockyards  at 
Chatham,  they  were  able  to  make  their  complaints 
heard  and  to  obtain  some  redress.  But  the  igno- 
rant and  helpless  peasant  was  cruelly  ground  be- 
tween one  class  which  would  give  money  only  by 
tale  and  another  which  would  take  it  only  by 
weio:ht. 


THE  END. 


T 


HE  WARFARE  OF  SCIENCE  WITH 

THEOLOGY,     a  history  of  the  warfare 

OF  SCIENCE   WITH  THEOLOGY   IN   CHRISTENDOM.      By 

Andrew  D.  White,  LL.  D.,  Late  President  and  Pro- 
fessor of  History  at  Cornell  University.  In  two  vol- 
umes.    Second  edition.     8vo.     Cloth,  $5.00. 

* '  The  story  of  the  struggle  of  searchers  after  truth  with  the  organized  forces  of 

jnorance,  bigotry,  and  superstition  is  the  most  inspiring  chapter  in  the  whole  his- 

y  of  mankind.     That  story  has  never  been  better  told  than  by  the  ex- President  of 

ornell  University  in  these  two  volumes.  ...  A  wonderful  story  it  is  that  he  tells." 

-London  Daily  Chronicle. 

"The  two  noble  volumes,  packed  with  rare  historical  data  and  printed  and 

iothed  in  the  best  style  of  modern  typographical  art,  more  than  realize  the  promise 

the  earlier  essays.     The  book  is  an  invaluable  record  of  the  difficulties  that  bib- 

^  superstition  has  interposed  to  the  advance  of  physical  knov/ledge  ;  a  treasury 

nformation  concerning  the  progress  of  modern  science,  gathered  with  the  most 

luous  and  patient  research  during  a  quarter  of  a  century  in  the  libraries  not  only 

lis  country,  but  of  Europe  also.     The  painstalcing  investigations  and  rare  eru- 

it  embodies,  the  broad  field  it  has  so  diligently  delved  and  gleaned,  and  the 

mt  Christian  spirit  it  manifests,  make  it  a  monumental  work,  destined  to  be- 

a  classic  authority  on  the  subjects  it  has  made  its  own  henceforth.     The  pre- 

works  in  this  field,  such  as  Dr.  Draper's  '  Conflict  of  Religion  and  Science ' 

Professor  Shields's  '  Final  Philosophy,'  must  yield  pre-eminence  to  President 

.te's  admirable  history.     The  new  book  is  far  fuller  and  more  accurate  in  its 

■     rative,  clearer  in  its  treatment,  and  more  judicious  in  its  judgments." — The  New 

I  ^orld^  London. 

"  It  is  a  complete  survey  of  the  whole  field  of  battle.  .  .  .  The  chapters  are  full 
of  striking  interest.  The  author  of  these  volumes  shows  that  the  warfare  of  science 
Jias  never  been  v/ith  religion,  but  only  with  old  errors  that  were  confounded  with  it, 
and  that  the  Eternal  Verities  become  the  more  clear  and  sure  as  the  ancient  guesses 
which  have  been  confounded  with  them  are  cleared  finally  away." — London  Daily 
News. 

Such  an  honest  and  thorough  treatment  of  the  subject  in  all  its  bearings  that  it 
11  carry  weight  and  be  accepted  as  an  authority  in  tracing  the  process  by  which  the 
ientific  method  has  come  to  be  supreme  in  modern  thought  and  life." — Boston 
'erald. 

*'  It  is  graphic,  lucid,  even-tempered — never  bitter  nor  vindictive.  No  student  of 
iiman  progress  should  fail  to  read  these  volumes.  While  they  have  about  them  the 
■^nation  of  a  well-told  tale,  they  are  also  crowded  with  the  facts  of  history  that 
..v'e  had  a  tremendous  bearing  upon  the  development  of  the  race. " — Brooklyn  Eagle. 
"  A  conscientious  summary  of  the  body  of  learning  to  which  it  relates,  accumu- 
ted  during  long  years  of  research.  ...  A  monument  of  industry.  '* — New  York 
veni?ig  Post. 


THE  W/vRFa*:         r  :>v.i':"T'FT^'       THEOLOGY.— (Continued.) 


*'  So  interesting-  as  to  enchain  the  attention  at  once  and  keep  it  enchained.     Co  j 
cise  as  a  history  of  the  universe  could  be  made,  tabulated  so  that  instant  referen  ' 
to  a  particular  bit  of  history,  theory,  or  biography  may  be  had,  it  will  be  valuable 
a  lexicon  relating  to  religious  controversy." — Chicago  Times- Her  aid. 

**  Dr.  White  knows  much  of  science  and  he  knows  much  of  theology.  But  h 
point  of  view  is  that  of  a  historian.  It  is  this  fact  which  gives  the  greatest  value 
his  book.  We  have  whole  libraries  of  controversial  works  dealing  with  the  rel 
tions  between  science  and  theology,  but  they  have  been  written  either  by  scientis 
or  theologians.  President  White  occupies  the  impartial  position  of  the  histoi; 
scholar,  who  has  no  prejudices  against  the  truth  of  science  and  no  hostility  towa: 
the  truth  of  religion." — New  York  Review  of  Reviews. 

"The  work  is  a  masterpiece  of  a  mind  as  devoid  of  wanton  iconoclasm  as 
moral  cowardice.     It  is  a  definite  statement  of  where  the  best  thinkers  of  the  wor 
now  stand  in  the  religio-scientific  conflict.     It  is  clear,  honest,  brave,  and  must  1 
given  a  place  among  the  great  books  of  the  year." — Chicago  Tribune. 

"  This  is  and  will  continue  to  be  one  of  the  great  books  of  the  world,  like  Th 
cydides's  '  History  of  the  Peloponnesian  War.'  So  long  as  Science  and  Theolo| 
retain  their  place  in  human  interest,  this  history  of  the  conflict  of  ages  between  the 
will  exert  its  attraction  and  read  its  lesson.     It  is  a  great  book." — The  Outlook. 

*'  Few  books  published  in  this  impatient  age  can  be  so  truly  said  to  represent  tl 
study  and  reflection  of  a  lifetime.  It  bears  on  every  page  the  stamp  of  maturit 
The  plan  has  been  thought  out  to  the  utmost  borders  of  the  subject,  and  the  di 
cussion  carried  into  every  field  of  inquiry  which  promised  to  yield  an)-thing." — T^ 
Independent. 

"  Undoubtedly  the  most  exhaustive  treatise  which  has  been  written  on  this  su 
ject.  .  .  .  Able,  scholarly,  critical,  impartial  in  tone  and  exhaustive  in  treatment 
— Boston  Advertiser. 

*'  Mr.  White  gathers  together  facts  bearing  on  his  subject  from  all  ages,  land 
and  peoples,  and  weaves  them  together  in  as  wise,  learned,  simple,  and  delightful 
discourse  as  you  will  find  in  all  similar  literature.  .  .  .  His  work,  moderate  in  ton 
logical  in  argument,  and  free  from  the  contemptuous  tone  of  skepticism,  is  one  • 
the  great  literary  and  intellectual  events  of  the  year,  if  not  the  chief  one." — Chica^ 
Evening  journal. 

' '  The  same  liberal  spirit  that  marked  his  public  life  is  seen  in  the  pages  of  h 
book,  giving  it  a  zest  and  interest  that  can  not  fail  to  secure  for  it  hearty  commend 
tion  and  honest  praise." — Philadelphia  Public  Ledger. 

' '  This  is  by  far  the  most  elaborate,  and  we  might  say  the  most  worthy,  of  eve 
popular  reading,  because  there  is  no  dull  page,  no  narrative  or  argument  which 
not  easily  comprehended,  and  which  is  not  calculated  to  demonstrate  the  truth « 
his  theme.    Few  novels  will  be  found  more  interesting  to  the  intelligent  reader.  "- 
Cleveland  World, 


Ar 


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LO.A.M  ncDion    1 

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DUE  AS  STAMPED 


|i«a 


>W 


-rr 


jftCOlB- 


OCT 


-00 r 


JUN161980 


kcciR.    MAY  19  1380 


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REC.  iLLDEC2:.  1978 


gEP'30  19 


D^^  y 


UNIVERSITY  OF  CALIFORNIA,  BERKELI 
FORM  NO.  DD6,  40m,  3/78  BERKELEY,  CA  94720 


